How does privatization help stimulate gains in economic efficiency?
A) It allows newly privatized firms to gain monopoly position in a particular industry.
B) It provides incentives to new private owners to search for increases in productivity and to enter new markets.
C) It encourages state control over price and production output.
D) It raises barriers to direct investment by foreign enterprises.
E) It results in reservation of heavy industry for state ownership and the increase of import tariffs.

Question

Quizplus · Accepted Answer

Privatization transfers ownership from the public to the private sector, where private owners have a profit motive to improve efficiency, productivity, and competitiveness, often leading to economic gains.

How Does Privatization Help Stimulate Gains in Economic Efficiency