Which of the following are associated with the term 'Shock Therapy'?

(a) total shift to a capitalist economy
(b) private ownership of means of production
(c) State-controlled economy
(d) currency convertibility

Choose the correct option:

(a), (b) and (d) are correct

The correct answer is Option 3 - (a), (b) and (d) are correct

"Shock Therapy" refers to the painful transition from an authoritarian socialist system to a democratic capitalist system, which was administered by the World Bank and the IMF to Russia, Central Asia, and Eastern Europe after the collapse of the Soviet Union.

(a) Total shift to a capitalist economy. This is correct. Shock Therapy aimed at rapidly transforming socialist economies into capitalist economies.

(b) Private ownership of means of production. This is correct. Privatisation of industries and transfer of ownership from the state to private individuals was a major feature of Shock Therapy.

(c) State-controlled economy. This is incorrect. Shock Therapy was introduced to reduce state control over the economy and encourage market forces.

(d) Currency convertibility. This is correct. Shock Therapy promoted free market policies, including convertibility of currency for international trade and investment.

State-controlled economy was not FEATURE OF THE SHOCK THERAPY.

NCERT: "The model of transition in Russia, Central Asia and east Europe that was influenced by the World Bank and the IMF came to be known as ‘shock therapy’. Each of these countries was required to make a total shift to a capitalist economy, which meant rooting out completely any structures evolved during the Soviet period. Above all, it meant that private ownership was to be the dominant pattern of ownership of property. Privatisation of state assets and corporate ownership patterns were to be immediately brought in. Collective farms were to be replaced by private farming and capitalism in agriculture. This transition ruled out any alternate or ‘third way’, other than state-controlled socialism or capitalism."