One potential cost of environmental regulation is reduced capital investment.FalseTrue

The statement "One potential cost of environmental regulation is reduced capital investment" is True.

Explanation:

Environmental regulations often impose additional compliance costs on businesses, which can lead to a shift in their financial priorities. Companies may allocate a portion of their capital that would've been directed towards investment in growth or innovation to comply with regulatory requirements instead. This can manifest as reduced capital expenditure on new projects, facilities, or technologies, potentially leading to slower economic growth. Additionally, the upfront costs associated with implementing measures to meet environmental standards can deter businesses from pursuing expansion plans, thereby decreasing overall capital investment in the economy. Thus, while environmental regulations aim to protect ecological health, they can inadvertently result in reduced capital investment.