Question

Which of the following statements in the context of shock therapy are correct?

1. The value of Ruble declined.
2. Shock therapy strengthened capitalism.
3. It reduced the prices of goods.
4. It was in favour of social welfare system.

Options

• (i) and (ii)

• (i) and (iii)

• (i), (ii) and (iii)

• (i), (iii) and (iv)

Answer 1

(i) and (ii)

Explanation:

Changing from a communist dictatorship to a democratic capitalist one is known as 'shock therapy.' The Russian Ruble's value went down during this change. Additionally, the old social support system collapsed, leading to widespread inflation throughout the entire country.