What Is Regulatory Capture

question 170

Multiple Choice

What is regulatory capture?

• A)It is a situation in which a policymaker seeks to improve his election prospects by aligning himself with a powerful special interest group which will finance his political campaign.
• B)It is the exchange of political support between a regulatory agency and the regulated firm resulting in both parties capturing economic rents.
• C)It is a situation in which a firm being regulated successfully influences the regulatory agency's actions to benefit the interests of the firm, rather than the public interest.
• D)It is a situation in which a regulatory agency uses its authority to force actions that are not favored by the regulated firms but are in the public's interest.

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Definitions:

Government Funded

Financial support provided by government agencies for projects, programs, or research, typically through grants or subsidies.

Private Sector

The part of a country's economic system that is run by individuals and companies, rather than by the government.

Private Organizations

Entities that operate independently of government control, often driven by private ownership or non-profit motives.

Medicare Coverage

A federal health insurance program in the United States for people aged 65 and older, as well as for some younger individuals with disabilities.