- 05/22/2019 at 2:20 pm #957220EduGorillaKeymasterSelect Question Language :
India has suffered from persistent high inflation. Increase in administered prices, demand and supply imbalances, imported inflation aggravated by rupee depreciation, and speculation – have combined to keep high inflation going. If there is an element common to all of them, it is that many of them are the outcomes of economic reforms. India’s vulnerability to the effects of changes in international prices has increased with trade liberalisation. The effort to reduce subsidies has resulted in a continuous increase in the prices of commodities that are administered.
What is the most logical, rational and crucial message that is implied in the above passage?
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Under the present circumstances, India should completely avoid all trade liberalisation policies and all subsidies.
Due to its peculiar socio-economic situation, India is not yet ready for trade liberalisation process.
There is no solution in sight for the problems of continuing poverty and inflation in India in the near future.
Economic reforms can often create a high inflation economy
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