Q. 25.0( 1 Vote )
Explain the consequence of shock therapy.
The economic transition model influenced by the World Bank and the IMF, which was implemented in Russia, Central Asia and East Europe after the disintegration of the USSR is known as ‘shock therapy’. It was a painful process of transition for majority of the authoritarian socialist system based countries like Russia to a democratic capitalist system which ultimately ruined the economics of the nations involved.
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Which one of the following was not given primacy by the makers of the Soviet System?
a) Abolition of private property.
b) Society based on the principle of equality.
c) No opposition party to be allowed.
d) No state control over economyPolitical Science - Board Papers
The value of the ruble declined dramatically. The rate of inflation was so high that people lost all their savings. The collective farm system disintegrated leaving people without food security, and the government started to import food. The old trading structure broke down with no alternative in its place. The old system of social welfare was systematically destroyed. The withdrawal of government subsidies pushed large sections of the people into poverty.
Read the above passage carefully and answer the following questions:
(i) What is meant by subsidy?
(ii) How did the disintegration of collective farm system lead to the loss of food security?
(iii) This passage is associated to which country? Why did the government start importing food?Political Science - Board Papers