Why Do Lobbying Firms Often Hire Former Members of Congress

question 9

Multiple Choice

Why do lobbying firms often hire former members of Congress?

• A) Powerful party leaders pressure lobbying firms to do so.
• B) Former members of Congress will work more cheaply because of their
• Government pension.
• C) Doing so makes it less likely that the group will be audited or investigated by federal agencies like the Internal Revenue Service.
• D) Former members of Congress can provide the group with important information, such as what kinds of policies individual legislators will support.
• E) Former members of Congress are typically wealthy and willing to contribute large sums of money to the lobbying firm when hired.

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Definitions:

Cash Dividend

A monetary payment paid to shareholders, typically out of the corporation's current earnings or accumulated profits.

Capital Budgeting

The process a business undertakes to evaluate potential major investments or expenditures to ensure profitability.

Ex-Dividend Date

The date on which a stock begins trading without the right to receive the next dividend payment, causing its price to adjust downwards.

Brokers

Intermediaries that facilitate buying and selling of securities, commodities, or other financial instruments on behalf of clients.