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________ is a system of representation that encourages third-party voting because it allows each political party representation in proportion to its percentage of the total vote.

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The name of the system is called Proportional representation. This system characterizes electoral systems by which divisions in an electorate are reflected proportionately in the elected body. The essence of such a system is to ensure that all votes contribute to the result: not just a plurality, or a bare majority, of them.
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