CHAPTER 56 GOVERNMENT INTERVENTION AND PRODUCT MARKETS

Question 1

Competitive tendering

Answer 1

Introducing competition among private sector firms which put in bids for work which has been contracted out by the public sector.

Question 2

Contracting out

Answer 2

Getting private sector firms to produce the goods and services which are then provided by the state for its citizens.

Question 3

Deregulation

Answer 3

The process of removing government controls from markets.

Question 4

Regulatory capture

Answer 4

An example of government failure, it occurs when firms in an industry are able to influence to their advantage a regulatory body which is supposed to be regulating the behaviour of those firms.

Question 5

Nationalisation

Answer 5

The transfer of firms or assets from private sector ownership to state ownership. It is the opposite of privatisation.

Question 6

Privatisation

Answer 6

The transfer of organisations or assets from state ownership to private sector ownership. It is the opposite of nationalisation.