A Level Economics AQA Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the A Level Economics AQA Exam with our interactive quiz. Test your knowledge with multiple choice questions and detailed explanations. Equip yourself with the tools needed for success!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is one reason a government might nationalise an industry?

To encourage foreign investment
To ensure public ownership of essential services
To increase competition among private firms
To reduce the size of government

The correct answer is: To ensure public ownership of essential services

A government may nationalise an industry primarily to ensure public ownership of essential services. This approach is often taken when a government believes that certain industries, especially those providing critical services like water, electricity, and healthcare, should be maintained as public goods. The rationale behind this is rooted in the belief that essential services should be accessible to all members of society, regardless of their ability to pay, and that public ownership can help prioritize social welfare over profit. Nationalisation allows the government to control prices, ensure consistent quality, and provide services without the profit motive that typically drives private companies. This can lead to more equitable access to services, as the aim shifts towards serving the public interest rather than maximizing shareholder returns. By nationalising key industries, governments aim to safeguard these sectors against market failures or monopolistic practices that could harm consumers.