Question

What is liberalism? Describe any 4 effects of liberalisation on the Indian economy.

Answer 1

Liberalisation means the opening of the country for foreign investments and capitals. Trade barriers are often used  by countries to protect the domestic industries from the products of foreign land. usually countries resort to impose Licenses, Import quotas or Voluntary export restraints to protect local markets. However after liberalization organizations like the WTO attempted to reduce production and consumption distortions created by tariffs. Free trade benefits consumers through increased choice and reduced prices. On the other hand free flow capital ensures that any country can make investments in the alien land.
Impacts:Increase in the foreign trade
Increase in foreign investment
Exchange of technology between countries
Better means of communication have developed alongside globalisation.

Answer 2

Liberalism of an economy means to free the trade from direct or physical control imposed by government :-

1. Competitions food improve the performance of producers within the country
2. Barriers on foreign trade and investment were removed to a large extent. This means that good could be imported and exported easily .
3. Foreign companies have set up their factories and offices to bring up their production .
4. it allows to make decisions freely