1.4.2 Government failure Flashcards
1
Q
Government failure
A
when government intervention causes a deeper market failure.
Can be either when the intervention is simply ineffective
or
where the intervention produces new and more serious problems that did not exist before
2
Q
Net welfare loss
A
An overall loss of economic welfare when compared to the starting position
3
Q
Regulatory capture
A
When a government agency operates in favour of producers rather than consumers
4
Q
Unintended consequences
A
Outcomes that are not the ones foreseen and intended by a purposeful action
