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Chapter 5 Administrative Law

Learning Objectives

After reading this chapter, you should be able to do the following:

  1. Understand the purpose served by federal administrative agencies.
  2. Know the difference between executive branch agencies and independent agencies.
  3. Understand the political control of agencies by the president and Congress.
  4. Describe how agencies make rules and conduct hearings.
  5. Describe how courts can be used to challenge administrative rulings.

From the 1930s on, administrative agencies, law, and procedures have virtually remade our government and much of private life. Every day, business must deal with rules and decisions of state and federal administrative agencies. Informally, such rules are often called regulations, and they differ (only in their source) from laws passed by Congress and signed into law by the president. The rules created by agencies are voluminous: thousands of new regulations pour forth each year. The overarching question of whether there is too much regulation—or the wrong kind of regulation—of our economic activities is an important one but well beyond the scope of this chapter, in which we offer an overview of the purpose of administrative agencies, their structure, and their impact on business.