Economics 9708 · AS & A Level · Maximum and minimum prices

Maximum and minimum prices — practice question

A government is worried that companies owned by foreigners account for a large share of the economy’s output. It therefore nationalises timber extraction, which is run by a foreign-owned company. What benefit will the economy receive from the change in ownership?

  • Aforestry workers will become the new owners
  • Bprofits will no longer be sent abroad to foreign shareholders
  • Csocial costs arising from forestry will be eliminated
  • Dthe market for timber will become more competitive

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