Question

State whether the following statement is true or false with reason.

Globalisation brought in the concept of the market economy.

Globalisation introduced the concept of Market Economy.

Options

• True

• False

Answer 1

This statement is True.

Explanation:

1. During the Cold War, the economic systems followed by countries depended upon their ideology. E.g., most West European nations and the USA were free democracies and followed a capitalist economy.
2. In the era of globalisation, there is only a 'market economy'. However, the country's ideology determines the nature of the market economy, e.g., China has a socialist market economy, West European nations are described as 'welfare market economies', and the USA is considered a 'capitalist market economy'.
3. In most countries, the State has withdrawn from economic activities, and the private sector and profit motive have propelled the economy.