Many economists believe that when the federal government establishes an agency to regulate a particular industry, the regulated firms try to influence the agency even if these actions do not benefit the public.Economists refer to this result of government regulation by which of the following terms?

Question

Quizplus · Accepted Answer

Regulatory capture refers to the phenomenon whereby regulated firms or industries effectively "capture" the regulatory agency that is supposed to oversee them, using various tactics to influence the agency's decisions in their favor. This can lead to a situation in which the agency serves the interests of the regulated industry or firms, rather than the public interest it is supposed to promote.

Many Economists Believe That When the Federal Government Establishes an Agency