Government failure
What Government failure means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Government failure
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Reference: Pearson Edexcel
A situation where the costs of regulation can outweigh the benefits, or regulators act in the interest of the firms they oversee, leading to misallocation of resources.
A net welfare loss resulting from intervention rather than an improvement.
Topics that use Government failure
- Arguments for and against regulation (Pearson Edexcel A-Level)
- Government intervention and failure (Pearson Edexcel A-Level)
Related terms
- Indirect taxation
- Information gaps
- Market intervention
- Regulatory capture
- Resource allocation
- Social welfare
- Economic efficiency
- Legislation
Using Government failure in the exam
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