One Primary Reason Why Regulatory Capture May Occur in an Industry

question 160

Multiple Choice

One primary reason why regulatory capture may occur in an industry is that

• A) the government designates unelected officials to head the various regulatory agencies of different industries.
• B) there is a lot of bribery and corruption going on in all major industries that the government seeks to regulate.
• C) the industry's leaders are the ones who pushed for the government to impose supervision and regulation over their industry.
• D) people who are qualified to supervise and regulate the industry often come from the industry itself.

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Definitions:

Subchapter S Stock

Refers to shares of corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes.

Capital Contributions

The funds or resources contributed by owners or shareholders for the use in furthering the business or enterprise.

Shareholder's Basis

The amount of a shareholder's investment in stock of a corporation, adjusted for various tax-related items.

Corporate Debt

Financial obligations owed by a corporation, typically in the form of bonds, loans, or other types of securities.