government intervention and regulation definitions

Question 1

deregulation

Answer 1

involves removing government legislation and laws in a particular market, It refers to removing barriers to competition

Question 2

pfis

Answer 2

private finance initiative, a method of providing funds for capital investment where private firms are contracted to manage and complete public projects

Question 3

competitive tendering

Answer 3

government allows private firms to bid/ right to run a service/ gain a certain contract

Question 4

privatisation

Answer 4

transfer of business/ industry/ service from public to private ownership and control

Question 5

nationalisation

Answer 5

transfer of a major branch of industry/commerce from private ownership to state ownership and control

Question 6

regulatory capture

Answer 6

form of government failure which happens when the government operates in favour of producers than consumers

Question 7

rpi - x

Answer 7

price regulation, regulators blieve there have been efficiency gains in the industry which should be passed to consumers (x is the efficiency gains)

Question 8

rpi + k

Answer 8

price regulation where regulators believe firms need to raise prices to invest in the industry (k us the amount prices can increase above inflation)

Question 9

rate of return regulation

Answer 9

regulation how much proft an industry can make by trying to limit super normal profts

Question 10

performanc targets

Answer 10

hard targets on performance set by government to ensure consumers are receiving good/ improving service from firms with monopoly power

Question 11

competition and markets authority

Answer 11

UK body regulating mergers to prevent collusion and promote competitive markets