Question

Why might a stringent rule that induces a few firms to reduce production be less likely to reduce the economic growth rate than a less stringent but broader regulation that causes all industries to cut their production?

Short answer

Stringent rule centres around negative varieties of inefficiency and the impact on the presentation and effectiveness.

Step-by-step solution

Introduction

Stringent rules diminish the efficiency and adversely affect economic prosperity and the presentation of the business particularly for the new passage of business substances.

Explanation

If we describe the market relationship between the regulations and flexibility or efficiency we can understand that the overall productivity of all producers is affected by regulations. Thus the higher regulated industries are least productive.