Privatisation as Government Revenue Tool

Steps:

• Define nationalisation: Government takes ownership of private industries for public control.
• Define privatisation: Government sells state-owned industries to private entities for market efficiency.
• Evaluate options: Check each against economic principles of ownership transfer.
• Select correct: Identify statement aligning with privatisation's fiscal impact.

Why D is correct:

• Privatisation transfers government assets to private buyers, generating direct revenue through sales proceeds, as per fiscal policy definitions.

Why the others are wrong:

• A: Privatised industries face market competition, making them more competitive than state-controlled nationalised ones.
• B: Governments can nationalise profitable companies for strategic reasons, like national security.
• C: Privatisation is fiscal policy (revenue and spending), not monetary policy (money supply and interest rates).

Final answer: D