Final answer:
Regulations are designed to foster trust in society by setting and enforcing standards that govern economic and social behaviors. They establish the 'rules of the game' for markets and have a significant impact on both market-oriented and command-oriented economies to prevent underground economies.The correct option is B.
Step-by-step explanation:
Regulations are essential components of the systems governing society and economic behaviors. These rules, set and enforced by government bodies, ensure that minimum standards are upheld across various aspects of life. Among the options, the one that best describes regulations is "B. They are meant to improve trust in society between entities." Regulations play a pivotal role in ensuring fairness, safety, and trust within the market and between different members of society. For example, they help in safeguarding private property, protecting people from violence, enforcing legal contracts, preventing fraud, and collecting taxes.
It's important to note that regulations do carry legal weight and are enforceable; thus, option A is incorrect. Although regulations are often developed with the input of subject matter experts, they are generally enforced by government agencies rather than the experts themselves, making option C misleading. Regulations form the fundamental "rules of the game" in an economy, defining how markets operate, what can be produced, and at what price points. This framework helps in maintaining an even-playing field for participants and attempts to curb the establishment of underground economies or black markets.