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Flashcards in Privatisation & Nationalisation Deck (4)
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1
Q

Define privatisation

A

Transfer of state owned resources to the private sector

2
Q

Define nationalisation

A

Transfer of privately owned resources to the public sector

3
Q

What are the positives of nationalisation

A

Positive externalities —> services that provide positive externalities will be underconsumed/underrpvidied by the free market
Monopolies —> public sector monopolies will not abuse its dominant position and exploit consumers with higher proces

4
Q

What are the positives of privatisation

A

Creates competition —> incentives to achieve EoS and efficiencies
Monopolies —> efficient incontestable markets
Government receives revenue form selling state owned businesses