Public corporations

Question 1

what are public corporations

Answer 1

business organisations owned by a centred or local government

Question 2

what are the main features of a public corporation (6)

Answer 2

state owned
created by law
publically accountable
state funded
provide public services
incorporated

Question 3

what does it mean when a business is state owned

Answer 3

meaning the state will appoint executives, workers, and will regulate internal affairs of the business

Question 4

what are some reasons for the public ownership of businesses

Answer 4

to avoid wasteful duplication
maintain control of strategic industries
save jobs
fill gaps left by the private sector
serve unprofitable regions

Question 5

what is meant by avoiding wasteful duplications

Answer 5

in some countries, it is better to have one organisation providing a good or services rather than multiple. for example there may only need to be one water provider because it would be wastefull to have to water infrastructures providing water to households, and would also be in efficient

Question 6

what is a natural monopoly

Answer 6

a market where it is more efficient to have one organisation meeting the markets total demand

Question 7

what are some of the reasons against public ownership

Answer 7

the cost to the government, if public business make losses, they need to be met by the taxpayers money, money used to subisidse these corporations may be used for better alternatives

innefficiency
political interference
difficult to control because of the larger scale of public business due to natural monopolies, like the NHS

Question 8

what is meant by subsidise

Answer 8

paying for part of the costs, often by government

Question 9

what is privatisation

Answer 9

transfer of public sector resources to private sector businesses

Question 10

what are the ways to privatise (4)

Answer 10

sale of public corporations, slowly selling shares of the business
contracting out, allowing private sector business to bid for previously publically supplied goods and services such as school meals etx
deregulation, lifting legal restriction that wouldnt allowed competition with public organisations
the sale of property and land such as offering discounts on real estate for tenants to buy

Question 11

what are the reasons for privatisation

Answer 11

to generate income
to reduce inefficiency within the public sector
as a result od deregulation - existing firms were privatised so new firms can join the market
to reduce political interference