Question

Which sentences in this paragraph describe two government policies that liberalize the economy?

The government of a country observes that the economy has grown slowly over the past five years. The gradual increase in earnings each year is due to exporting natural resources. But the citizens seem to be unmotivated to start new businesses. (A) "So, the government decides to reduce the tariffs on imported raw materials." (B) "It also introduces special economic zones where certain goods can be traded tax-free." (C) "In addition, it introduces a policy to provide free education to all children up to grade 10." This step is aimed at producing more skilled labor. (D) "The government also decides to give free healthcare to all citizens over the age of 60."

Answer 1

(A) "So, the government decides to reduce the tariffs on imported raw materials."

(B) "It also introduces special economic zones where certain goods can be traded tax-free."

Step-by-step explanation:

Liberal economic policies usually revolve around deregulation of many governmental policies, since advocates tend to prefer a market that is as free as possible – meaning, it is free of governmental influences. Liberal economy is also a form of capitalism, and thus they would support (A) and (B) most, since it reduces barriers for businesses to operate at a profit.

They would not support (C) and (D) since these two concepts are instead socialist economic policies.