Explain what rent seeking is and how it may reduce the benefits ...

[futuristic]

Explain what rent seeking is and how it may reduce the benefits of industrial policies.
 
  What will be an ideal response?

Question 2

Deliberation councils have no private sector input.
 
  Indicate whether the statement is true or false

[macagnavarro]

Answer to Question 1

Rent seeking is any activity by firms, individuals, or special interests that is designed to alter the distribution of income in their favor without adding to the amount of total income in the economy. If firms know that governments are willing to use industrial policies, they will spend resources to obtain some of the subsidies. This may require the hiring of lobbyists, economists, or engineers who will work to persuade the legislature or some other rule makers. The downside is that it uses resources but does not add to total output.

Answer to Question 2

FALSE

[futuristic]

Thank you

[macagnavarro]

No problemo