T3.6: Government Intervention Flashcards
What is the Competition and Markets Authority (CMA)?
Main competition policy body in the UK. Their main stated aim is to make markets work well for consumers, businesses and the economy.
What is competition policy?
Any policy which seeks to promote competition & efficiency in markets and industries.
What is competitive tendering?
When a project is put out to tender so that firms can bid for the right to provide the service e.g. laundry services in hospitals, tenders to maintain public roads.
What is a consumption tax?
A tax imposed on the consumer of a good or service. This can be levied at the final sale level (sales tax), or at each stage in the production.
What is deregulation?
The opening up of markets to competition by reducing one or more barriers to entry. The aim is to increase market supply, stimulate competition and innovation and drive prices down for consumers.
What is laissez-faire?
A doctrine that government should not interfere with actions of business and markets.
What is light-touch regulation?
An approach of government to managing business behaviour - prefers to ‘influence’ rather than ‘legislate/regulate’.
What is nationalisation?
When a government takes over a private sector company.
What is a patent?
Right under law to produce and market a good for a specified period of time.
What are performance targets?
These are often imposed on utility companies to ensure that the consumer is treated fairly and within a reasonable amount of time.
What is price regulation?
Government control of prices, normally for utilities and other essential services.
What is the Private Finance Initiative (PFI)?
The PFI is a means of obtaining private funds for public sector projects.
What is privatisation?
The sale of state-owned companies to the private sector, normally through a stock market listing. The opposite of nationalization.
What is procurement collusion?
Where companies illegally bid for large contracts by rigging bids to decide which one of them gets the contract in advance.
What is profit regulation?
Profits in markets where businesses have monopoly power may be regulated through interventions such as price capping or windfall taxes on monopoly profits.
