A situation in which ethnic cultures have a distinct and separate existence even while their members participate in the economic and political life of the larger society is known as:

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Pluralism refers to a society in which distinct ethnic or cultural groups coexist while maintaining their own cultural practices and identities, rather than being assimilated into a dominant culture or segregated from the larger society. In a pluralistic society, individuals can participate in the economic and political life of the larger society while also preserving their unique cultural traditions.

A Situation in Which Ethnic Cultures Have a Distinct and Separate