Privitsation And Regultion

Question 1

Privatisation

Answer 1

Government industries are sold to the private sector

Question 2

Benefits Privatisation (6)

Answer 2

• More money for other public sectors
• Innovation + invention: profit motive
• Long term view than gov
• Lack of political interference
• Efficiency
• Revenue from sales

Question 3

Drawbacks of Privatisation (6)

Answer 3

Short-termism of firms
Loss of dividends for gov
Innovation and invention from gov
Public interest not considered
Natural monopolies

Hard to regulate monopolies

Question 4

Regulation

Answer 4

The control of markets through rules and laws

Question 5

Examples of Regulation (3)

Answer 5

Smoking bans
Minimum age laws
Emission caps

Question 6

Advantages of Regulation (3)

Answer 6

Incentive to change behaviour
Slices free market issues
Allocative efficiency and welfare gain

Question 7

Disadvantages of Implementing Regulation (3)

Answer 7

• Costly to implement
• Hard to set correct regulation
• Could lead to unintended consequences

Question 8

Deregulation

Answer 8

When the government removes it reduces the restrictions in a particular industry to improve business operations and increase competition

Question 9

Aim of Deregulation

Answer 9

To open up the market and increase competition

Question 10

Nationalisation

Answer 10

The government buy up industry from the private sector