The Capture Theory of Regulation Indicates That a Regulatory Agency

question 23

Multiple Choice

The capture theory of regulation indicates that a regulatory agency:

• A) often serves the regulated firms rather than their customers.
• B) encourages other regulatory agencies to deregulate their industries.
• C) seeks to find market solutions that are economically efficient.
• D) extends its regulatory powers over industries it was not intended to regulate.

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Definitions:

Real Price

The market price adjusted for inflation, showing the purchasing power of an amount of money.

CPI

The Consumer Price Index represents a calculated average of the prices for a mix of consumer products and services, including food, transportation, and healthcare, weighted by their importance.

Geographic Extent

The area or scope over which a specific phenomenon, activity, or influence is spread.

Public Transit

Transportation services provided by public or private organizations that are available for use by the general public, typically involving buses, trains, and subways.