The Social Interest Theory of Regulation Asserts That Regulation

question 121

Multiple Choice

The social interest theory of regulation asserts that regulation

• A) seeks an efficient use of resources.
• B) is aimed at keeping prices as low as possible.
• C) helps firms maximize economic profit.
• D) of a natural monopoly must be done using rate of return regulation.
• E) does not work for society as well as would allowing the firms freedom from regulation.

---

Definitions:

Fixed Exchange Rate

A government policy to maintain the value of its currency at a set rate against another currency or a basket of currencies.

Covariance

A measure used in statistics to determine how much two random variables change together, indicating the direction of their linear relationship.

DAX Stock Market

The Deutscher Aktienindex (DAX), a major stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange.

Euro Bills

Short-term debt instruments issued by the European Central Bank and denominated in Euros.