What was a key element of shock therapy in transitioning from socialism to capitalism?
1) Gradual changes
2) A complete switch to free trade
3) Maintaining state-controlled socialism
4) Increasing collective ownership

Choose the correct answer from the given options:

2

Shock therapy involved a drastic change that included a complete switch to free trade as a key element in transitioning from socialism to capitalism.

Shock therapy also involved a drastic change in the external orientation of these economies. Development was now envisaged through more trade, and thus a sudden and complete switch to free trade was considered essential. The free trade regime and foreign direct investment (FDI) were to be the main engines of change. This also involved openness to foreign investment, financial opening up or deregulation, and currency convertibility. Finally, the transition also involved a break up of the existing trade alliances among the countries of the Soviet bloc. Each state from this bloc was now linked directly to the West and not to each other in the region. These states were thus to be gradually absorbed into the Western economic system. The Western capitalist states now became the leaders and thus guided and controlled the development of the region through various agencies and organisations