Agency "Capture" Occurs When

question 5

Multiple Choice

Agency "capture" occurs when

• A) an iron triangle forms.
• B) Congress begins to assume the regulatory functions that a federal agency is supposed to handle.
• C) a regulating agency begins to control the actual industry or business that it regulates.
• D) an industry begins to gain undue influence over the agency that regulates it.
• E) lobbyists effectively run a federal agency, performing all regulation duties themselves.

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Definitions:

Significant Influence

The ability to impact the financial and operating policies of an investee through ownership or contract without having full control or majority ownership.

Gross Profit

The difference between revenue and the cost of goods sold before accounting for certain other costs.

Intra-entity Sales

Transactions of goods or services between divisions or units within the same legal entity.

Equity Method

A technique where an investor reflects its share of an associate's or joint venture's profits or losses in its own financial statements, affecting the carrying value of the investment.