Can business regulation slow down our macroeconomic?

When there is government regulation, the firms must spend more money in order to comply with these regulations. For example, safety regulations in the construction industry cause the firm to spend more money on safety equipment and training. These cost make it more expensive to produce each unit of the good or service, which results in the entire supply curve shifting to the left. The corresponding equilibrium level is at a higher price and a lower quantity and the lower output level will slow down economic growth.