WGU Global Economics for Managers Exam - Topic 5 Question 1 Discussion

A democracy gives citizens the right to elect representatives who govern on their behalf. Option D is correct because political participation, representative government, accountability, and civil liberties are core features of democratic systems. Democracies generally have institutional checks and balances, rule of law, and mechanisms for peaceful leadership change. These features can reduce arbitrary government action and improve transparency for businesses. Option B describes totalitarianism, where one person or party holds absolute political control. Option C describes a political risk that may occur in some countries but is not a defining feature of democracy. Option A is also incorrect because democracies usually reduce extreme political uncertainty compared with authoritarian systems, although policy changes can still affect firms. The defining feature is citizen representation through elections.

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