One of the Earliest Theories Regarding the Impact of Regulation

question 47

Multiple Choice

One of the earliest theories regarding the impact of regulation on banks was developed by George Stigler.He contends that:

• A)firms in regulated industries actually seek out regulations because they bring monopolistic rents.
• B)regulations shelter firms from changes in demand and cost,lowering its risk.
• C)regulations can increase consumer confidence which increases customer loyalty to regulated firms.
• D)depository institutions should be regulated no differently than any other corporation with no subsidies or special privileges.
• E)None of the options are correct.

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