The Country of Morson Has Decided to Privatize the State-Owned

question 48

Multiple Choice

The country of Morson has decided to privatize the state-owned cable television company. How can the country help this newly privatized industry succeed?

• A) impose high corporate taxes on the company immediately after its privatization
• B) increase barriers to foreign direct investment
• C) intervene in the company's operations by exercising price controls
• D) split the company into independent units to compete with each other
• E) prohibit foreign companies from entering into the field of telecommunication

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Definitions:

Equilibrium

A condition or state where supply equals demand, resulting in a stable market environment.

Currency Selection Return

The return attributed to the choice of currency in which investments are denominated.

EAFE

An abbreviation for Europe, Australasia, and Far East, representing a stock market index that gauges the equity market performance of developed markets outside of the U.S. and Canada.

Benchmark

A standard or reference by which others can be measured or judged, often used in finance to compare the performance of investments.