Question

In: Economics

Many US citizens believe that minimizing federal government involvement in favor of state government is preferable....

Many US citizens believe that minimizing federal government involvement in favor of state government is preferable. Give a reason why state-level regulation might be superior in establishing fuel efficiency standards. Give a reason why federal government regulation might be preferable to state-level regulation for establishing fuel efficiency standards.

Solutions

Expert Solution

One reason in favor of the state level regulation:

State level regulations will be specific to that particular state and consider the stage of automobile industry development, level of pollution and ability of the people to pay higher price for more fuel efficient vehicles. So, a state can design its policy that will be more effective, without decreasing the economic growth.

One reason in favor of the Federal level regulation:

Federal regulation brings one regulation for everyone in the USA. It will prevent any firm to move from one state to another state just because one state has more firms friendly regulation towards the fuel efficiency standards. So one federal regulation for all the states, will prevent the tendency among the state to make regulations that can attract more firms, rather taking care of the environment. So, federal regulation is better than the state level regulation.


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