Which of the following statements is true about privatization?
A)The privatization movement started in China in the early 1980s.
B)Privatization involves replacing a state-owned monopoly with a private monopoly.
C)For privatization to become successful,countries should adopt communism.
D)When newly privatized firms are extensively protected from foreign competition,they have little incentive to restructure their operations to become more efficient.
E)In today's context,a country runs the risk of experiencing a serious economic crisis if it liberalizes and privatizes state-owned enterprises.

Question

Quizplus · Accepted Answer

When newly privatized firms are protected from foreign competition, they lose the incentive to become more efficient and competitive. This can ultimately harm the country's economy. The other statements are either false or irrelevant.

Which of the Following Statements Is True About Privatization