Theory question 109
Government and BusinessCommerce 2 (essay, answer five questions only)
(a) What is Nationalization?
(b) Explain three reasons why government nationalizes some businesses.
(c) State four disadvantages of nationalization.
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(a) Nationalisation is government taking over ownership and control of privately owned businesses.
(b) Any three, explained: to control strategic industries; to provide essential services at fair prices; to prevent exploitation by private monopolies; to stop profits going abroad; to protect jobs in failing firms; to raise government revenue.
(c) Any four: inefficiency and bureaucracy; political interference; corruption; losses and burden on government funds; discourages private/foreign investment; lack of competition leads to poor service.
Three reasons and four disadvantages.