Which of the following statements is true about privatization? A. The

QUESTION

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.

ANSWER

D
When the newly privatized firms are sheltered from competition and continue acting like state monopolies, they often have little incentive to restructure their operations to become more efficient.