Which of the following would be the best example of regulatory capture?
A) Starbucks buys up all the available supplies of coffee beans.
B) Nike executives inﬂuence the rules for track and ﬁeld events.
C) Federal law makers write and pass legislation that protects domestic companies from foreign competition.
D) Executives from the Ford, General Motors, and Chrysler companies write the rules regulating automobile safety and fuel requirements.

Question

Quizplus · Accepted Answer

Regulatory capture refers to the situation where the regulatory agency that is supposed to regulate an industry ends up being influenced or controlled by the very industry it is supposed to regulate. In this case, the executives from the Ford, General Motors, and Chrysler companies writing the rules regulating automobile safety and fuel requirements is an example of regulatory capture because they are essentially regulating themselves and could potentially bend the rules in their favor.

Which of the Following Would Be the Best Example of Regulatory