Deregulation and Privatisation Flashcards
1
Q
What is deregulation?
A
when regulations are removed to lower barriers to entry
2
Q
What is privatisation?
A
when the government transfers ownership of a public sector firm to the private sector
3
Q
What do both result in?
A
increased competition thus pressure to cut costs and increase efficiency
4
Q
What usually follows privatisation?
A
deregulation
5
Q
Why do public firms become lazy and x-inefficient?
A
because there is no profit incentive
