- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 10. Economics of Regulation
- Subject 1. Economic Rationale for Regulation
CFA Practice Question
The idea that regulations are supplied to satisfy the self-interest of producers to maximize economic profit is known as
A. public interest theory.
B. capture theory.
C. regulation theory.
Explanation: Regulatory capture occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating.
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