ECONOMICS 10

UNDERSTANDING
Name: ____________

Instruction:
Reread very carefully pages 215 – 217 of your textbooks and then complete the following gaps.

Some local areas are very dependent on________________. Some of these industries
may be ______________industries. In this case, the government will be making decisions such
as how much to _______________and the wages to pay, which directly affect the local community.

The industries which are in the _____________sector may be subsidized by the government to, for
instance, prevent rising in a relatively poor area. Some decisions on economic ___________will be taken
at the local level, rather than the national level. The extent to which ______________________are made at
the local level differ from country to country. Local ___________________may provide a range of goods
and services including refuse collection, libraries, housing, and local roads. To _____________ these, local
governments may impose some ________________and charges and may receive ______________from
the
national government.

state-owned governments produce policies

industries unemployment taxes grants

private decisions

The government as a producer

A government may produce products which it believes are of key importance, the products
that are produced by a natural________________, those which it thinks are essential and hence
should be available to all and those which the private sector may _________________or not
produce. Most countries seek to ensure that their key _________________survive and do well.
Key industries may be _________________industries or national champions. In China and
France, for instance, such industries are often run by state-owned_________________. In Italy,
they receive favored _______________from banks. In a number of countries, the government
also stops foreign companies from taking them over or ______________with them, such as
rail _______________which may be run or regulated by the government. This is, in part,
to prevent consumers being __________________by a private sector firm charging a high price. In
addition, to produce at a low average __________a high _______may be required and at such an output, a
loss may be incurred. A government may also produce ___________products, such as housing, on grounds
of equity and ________________and public goods.

under-produce monopoly strategic infrastructure

exploited loans industries enterprises

merging cost output essential

merit