"Regulatory Capture" Refers to the Situation Where a Government Agency

question 106

Multiple Choice

"Regulatory capture" refers to the situation where a government agency charged with supervising and regulating a particular industry is

• A) strongly influenced by the firms in the very industry that it is regulating.
• B) headed by bureaucrats who have a "lock" on their positions, without any rivals.
• C) completely dominating and controlling the actions of firms in the industry.
• D) headed by unelected government officials who have no strong desire to regulate.

---

Definitions:

Interest Rate

The percentage charged on borrowed money, reflecting the cost of borrowing or the gain from saving.

Capital Projects

Large-scale investment projects that require significant amounts of capital, typically in infrastructure, buildings, or technology, aiming for long-term benefits.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in discounting to address the time value of money.

Interest Rate

The fee, represented as a percentage of the total loan amount, that a lender requires from a borrower for the privilege of borrowing money or other resources.