Question

In: Economics

Explain why most economists would argue that a two-in/one-out rule for regulation is not consistent with...


Explain why most economists would argue that a two-in/one-out rule for regulation is not consistent with a cost-benefit approach to regulation. Give a potential rationale that would be used by some economists who believe that in practice it is. Define a regulatory approach. Repeat the previous analysis for a policy with a (small) regulatory budget.

Solutions

Expert Solution

Cost benefit analysis (CBA) sometimes called benefits costs analysis (BCA), is a systematic approach to estimating the strengths and weaknesses of alternative used to determine options which provide the best approach to achieving benefits. While preserving saving.

A CBA may be used to compare Complited or potential coarse of actions, or to evaluate the value against the cost decision, project, or policy. It is commonly used in commercial transactions business or policy decisions and projects investment.

A) To determine if an investment is sound, ascertaining if and by how much it's benefits outweigh it is cost.

B) To provide a basis for comparing the total expected cost of each option with its total expected benefits.

CBA is related to cost effectiveness analysis benefits and cost in CBA are expressed in monetary terms are adjusted for the time value of money all flows of benefits and cost over time are expressed on a common basics in terms of there net present value regardless of whether they are incurred at different times.

Because of rule for regulation is not consistent with cost benefit approach.

Above I explained cost benefit analysis approach, now rule for regulation  

"Regulations also called administrative laws or rules are the primary vehicles by which the federal government.

Implements laws and agency objectives they are specific standards or instruction concerning what individual business, and can or can not do.

Market economics need clear rules to function efficiently without a legal framework establishing and enforcing property rights and the "rules of the game" our free enterprise system could not exist.

Regulations issued by the executive branch affect every aspect of our lives frome the movement you make up until the time you go to the sleep regulation influence what you do yet most people know very little about the impact of regulation or the process by which they are produced.


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