Question

Which disadvantage is there due to economic liberalization?

• A. There is rise in foreign exchange.
• B. Industrial production is increased.
• C. Our capacity to compete is strengthened in the World trade.
• D. There is rise in economic inequality.

Answer 1

The correct option is D There is rise in economic inequality.

Economic liberalization refers to a country "opening up" to the rest of the world with regards to trade, regulations, taxation and other areas that generally affect business in the country. It was initiated in 1991 with the goal of making the economy more market and service-oriented. It led to increase in unemployment, increased dependence on foreign nations and unbalanced development of sectors which eventually resulted in economic inequality.