Question

Under the modern traditional theory, the sovereign may nationalize foreign-owned property only where: a. it is for a public purpose. b. the foreign firm that owned the property was operating it unprofitably. c. a communist government takes over the country. d. the foreign firm has continuously violated the laws of the host country.

Answer 1

Answer: a. it is for a public purpose.

Explanation:

According to the Modern Traditional theory on compensation which deals with the seizure of foreign-owned property by the government of the nation in which the property is located, the sovereign authorities may nationalize foreign-owned property if it is deemed to be for public use.

If the government has shown that nationalization is for the good of the nation, the theory espouses that it is allowed. They would however have to provide adequate compensation to those whom the property was seized from.