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Regulation imposes costs to economy

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Suppose a regulation imposes costs to the economy of $1 bn in the first year, $0.6 bn in the second year and $0.1 bn thereafter. Suppose that benefits of $0.5 bn per year start accruing after ten years and continue forever. Suppose the social discount rate is 4%. Should the regulation be adopted?

Reference no: EM133235654

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