971. What characterizes a transition economy?
A) A transition economy is one that is shifting from a centrally planned economic system to a market-oriented system.
B) A transition economy remains static and does not undergo any changes.
C) A transition economy is solely based on a market-oriented system.
D) A transition economy only follows a centrally planned economic system.
972. Why do countries undergo a transition to a market-oriented economy?
A) Countries transition to improve economic efficiency, increase productivity, and foster economic growth.
B) Countries undergo a transition for no specific reasons.
C) Transitioning economies have no impact on economic efficiency.
D) Economic efficiency is irrelevant in transitioning economies.
973. What challenges are associated with the transition to a market-oriented economy?
A) Challenges include establishing legal and institutional frameworks, dealing with unemployment, and managing inflation.
B) No challenges are associated with the transition to a market-oriented economy.
C) Legal and institutional frameworks are irrelevant in transitioning economies.
D) Transitioning economies do not face unemployment or inflation.
974. What role does privatization play in a transition economy?
A) Privatization involves transferring state-owned enterprises to private ownership, a key aspect of transitioning to a market-oriented economy.
B) Privatization has no role in transitioning economies.
C) State-owned enterprises remain unchanged in a transition economy.
D) Private ownership is irrelevant in transitioning economies.
975. How does a transition economy handle price liberalization?
A) Price liberalization involves allowing market forces to determine prices, a crucial step in transitioning to a market-oriented economy.
B) Price liberalization is irrelevant in transitioning economies.
C) Market forces have no impact on prices in transitioning economies.
D) Transitioning economies avoid liberalizing prices.
976. What is the role of currency reform in a transition economy?
A) Currency reform involves introducing a new currency or stabilizing the existing one, addressing inflation and supporting economic stability.
B) Currency reform is irrelevant in transitioning economies.
C) Inflation has no impact on currency in transitioning economies.
D) Transitioning economies avoid introducing a new currency.
977. How does a transition economy address macroeconomic stabilization?
A) Transition economies implement policies to control inflation, stabilize currency, and maintain overall economic stability.
B) Macroeconomic stabilization is irrelevant in transitioning economies.
C) Inflation has no impact on economic stability in transitioning economies.
D) Transitioning economies avoid stabilizing macroeconomic factors.
978. What is the significance of institutional development in a transition economy?
A) Institutional development involves establishing legal and regulatory frameworks essential for the functioning of a market-oriented economy.
B) Institutional development is irrelevant in transitioning economies.
C) Legal and regulatory frameworks have no impact on transitioning economies.
D) Transitioning economies avoid developing institutions.
979. How does a transition economy address social challenges during the transition process?
A) Transition economies implement social policies to address unemployment, income disparities, and other social issues arising from the transition.
B) Social challenges are irrelevant in transitioning economies.
C) Unemployment and income disparities have no impact on social issues in transitioning economies.
D) Transitioning economies avoid addressing social challenges.
980. What role does foreign investment play in a transition economy?
A) Foreign investment can bring capital, technology, and expertise, supporting the development of a market-oriented economy.
B) Foreign investment is irrelevant in transitioning economies.
C) Capital, technology, and expertise have no impact on transitioning economies.
D) Transitioning economies avoid foreign investment.
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