Chapter 8 MGMT350

Informal rule-making

(often called "notice and comment) Federal agencies must permit written comments on a proposal and may hold open hearings.

What are the executive duties of agencies?

-Conducting inspections and investigations -Administrating government benefits to the citizenry Spend a great deal of time conducting inspections and investigations and collecting information. Agencies enter into contracts, lease federal lands, register securities offerings, award grants, resolve tax disputes, settle workers' compensation claims, administer government benefits to the citizenry, and much more. Supervisory duties, including active and close attention to the banking industry, are a further illustration of agency executive duties.

What are the powers of Congress over agencies?

-Creating agencies -Dissolving agencies -Controlling agency budgets -Discouraging agency actions

What is true about the excessive regulation argument?

-Government rules reduce business efficiency -Small businesses struggle to bear the costs of new government rules

Which are public goods?

-Pollution control -Street lighting -National defense -Insect eradication

What is true of the challenges to the standard view of market rationality?

-Studies suggest that hormonal imbalances affect the financial decisions of (male) financial traders -people tend to operate with limited or bounded rationality when conducting business transactions

What were the financial reforms that were approved by Congress and President Obama in 2010 to improve America's financial regulatory structure?

-The Dodd-Frank Wall Street Reform -The Consumer Protection Act

What is true about public goods

-They cannot be provided through the pricing system -They can be determined by calculating the cost of benefiting one person

What is true of the parties involved in administrative hearing and trials?

-They have the right to present their cases and cross examine witnesses -They can file motions and raise objections. Parties have the right to present their cases, hire counsel, cross-examine, file motions, raise objections, and so on. They do not have the right to a jury trial, however.

What are the benefits or government regulation

-a vast highway network -legal equality for minorities and women -cleaner air -safer workplaces -greatly diminished child labor -enhanced auto safety

What are the roles of various administrative agencies?

-quasi-executive -quasi-legislative (rule-making) -quasi-judicial (adjudicatory) roles broadly involving control of supply, rates, and conduct in large segments of American life.

The National Highway Traffic Safety Administration recently issued a rule requiring all new vehicles under 10,000 pounds to have rear visibility technology (typically, backup cameras) by 2018. This rule is an example of an agency's application of its ________ rules. A) procedural B ) legislative C) interpretive D) substantive

B ) legislative

The Federal Communications Commission

Cancellation of radio license for failing to serve the public interest

The _______________ of the U.S. Constitution provides Congress the power to regulate commerce with foreign nations.

Commerce Clause

Which of the following rules offer an administrative agency's view of the meaning of those statutes for which the agency has administrative responsibility? A) Substantive rules B ) Legislative rules C) Procedural rules D) Interpretive rules

D) Interpretive rules

Public goods include which of the following? A) Those goods that can be provided to all consumers through a free market unencumbered by anticompetitive behavior. B) Those goods that can be excluded from people who choose not to pay for them. C) Those goods that can be produced in adequate quantities to benefit the general welfare of the public. D) Those goods for which the added cost of benefiting one person is zero or nearly so.

D) Those goods for which the added cost of benefiting one person is zero or nearly so.

Positive Externalities

Decision makers do not receive the full benefit of a decision because a portion of those benefits "spill over" on to third parties who were not direct participants in the decision

The National Labor Relations Board

Dismissal of an employee for engaging in protected union activities

The Department of Agriculture

Executive department

True or False: Local government intervention in business may only involve taxes.

False

True or False: The publication of a Notice of Proposed Rule Making is not mandatory in the case of an informal rule-making process

False

True or False: The federal government cannot regulate intrastate commercial activates even if they have a substantial effect on interstate commerce

False Even purely intrastate activities can be regulated by the federal government if they have a substantial effect on interstate commerce

According to the judgements of economists, the biggest effect of government regulations is job loss.

False Regulations have MINIMAL effect on job loss

True or False: High levels of government regulation and intervention have reduced the compliance costs and paperwork hours significantly.

False Regulatory compliance costs and paperwork hours have increased because of excessive government regulations.

Formal rule-making

Federal agencies must hold a public hearing conducted with most of the procedural safeguards of a trial after providing notice

The Federal Trade Commission

Identifying the harmful effect of misleading advertisements

In a free market, the government sometimes imposes regulations to ____________.

Improve the available information

Control by information

It compels companies to disclose consumer information that would otherwise remain private

Control by standards

It establishes minimum benchmarks that private sector enterprises must meet

Control by product banishments

It prohibits dangerous goods from entering the market

What is true about licensure?

It protects the public from unsafe, unhealthful, and substandard goods and services,

The Veterans Administration

Nonregulatory welfare department

Negative Externalities

Producers and consumers do not pay the full cost of a product, so those coasts are thrust on parties external to the transaction

The Federal Trade Commission

Regulatory department

Stages of Life Cycle regulatory

Stage 1: Existence of free market Stage 2: Identification of market failure Stage 3: Imposition of government regulation Stage 4: Occurrence of regulatory failure Stage 5: Introduction of regulatory of regulatory reform or deregulation

Purely intrastate commerce, with no effect on interstate commerce, is within the exclusive regulatory jurisdiction of the _________________.

States and localities

When state or local laws conflict with the federal laws, the problem is resolved by the application of the _________ of the U.S. Constitution

Supremacy Clause

The _________, a part of the Dodd-Frank Wall Street Reform, imposes a limit on the amount of a bank's own assets that can be used for some risky forms of proprietary trading.

The Volcker Rule

What is true of independent federal agencies

They are created via statutes labeled enabling legislation

Procedural rules

They delineate an agency's internal operating structure and methods

Legislative rules

They express how agencies exercise law-making functions delegated to them

Interpretive rules

They offer an agency's view of the meaning of statutes for which it has administrative responsibility

True or False: Congress has the exclusive discretion over foreign commerce according to the judiciary's interpretation of the Commerce Clause.

True

Judicial review of agency decisions turn on technical issues of law such as: Multiple Choice Did Congress cede too much of its authority to the agency? Were the agency's findings of fact supported by substantial evidence from the record as a whole? Did the president exercise too much control over the independent agency's internal affairs? Do the courts have the power to overrule an agency's interpretive rules?

Were the agency's findings of fact supported by substantial evidence from the record as a whole?

According to the federal law, any government unit other than the legislature and the courts is referred to a ___________.

agency

State governments in the United States ______________.

are primarily responsible for regulating the insurance industry

the federal governments authority over interstate commerce _______________________.

borderless

Executive agencies differ from independent agencies in that executive agencies are _______________.

cabinet-level departments (ex: Defense, Education, Energy, etc)

The costs and benefits of goods and services that are not completely internalized by producers and consumers are labeled by economists as __________.

externalities

The __________ rule-making process combines the elements of formal and informal rule-making that allows for more oral testimony and hearings.

hybrid

According to the U.S. constitution, the term ___________ refers to the right of a state government to promote the public health, safety, morals and welfare by regulating persons and property within its jurisdiction.

police power

The __________, with the advise and consent of the Senate, appoints the commissioners who direct each agency's affairs

president

Regulatory measures implemented by the government at the request of industry are effective in __________________.

reducing or eliminating the entry of competitors