The Capture Theory of Regulation Indicates That a Regulatory Agency

question 23

Multiple Choice

The capture theory of regulation indicates that a regulatory agency:

• A) often serves the regulated firms rather than their customers.
• B) encourages other regulatory agencies to deregulate their industries.
• C) seeks to find market solutions that are economically efficient.
• D) extends its regulatory powers over industries it was not intended to regulate.

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Definitions:

Schemas

Mental structures—collections of ideas, prior knowledge, and experiences—that help organize information and guide thought and behavior.

Assimilation

The cognitive process of fitting new information into pre-existing cognitive schemas, perceptions, and understanding.

Schema

A cognitive framework or concept that helps organize and interpret information.

Grasping

The act of taking hold of something firmly with the hands or arms, which is also a reflex seen in newborns.