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IAI Actuarial Core Principles · Business Economics · Recent macroeconomic history

Which of the following policy combinations best characterises the neoliberal programme adopted in the UK and US around 1979 to 1981, and the 1991 reforms in India, as discussed in economic history?

The neoliberal turn combined deregulation, privatisation, trade liberalisation and a priority on controlling inflation over full employment. Early monetarist experiments used money targets, and India's 1991 reforms similarly cut licensing and tariffs, contrasting with interventionist, import-substituting or Keynesian demand-management approaches.

  1. ANationalisation of key industries, exchange controls and fixed money growth by fiat
  2. BDeregulation, privatisation, reduced trade barriers and a tighter focus on controlling inflation rather than full employmentCorrect
  3. CWage and price controls with expansionary fiscal policy to achieve full employment
  4. DImport substitution with high tariffs and expanded public-sector monopolies
  5. Keynesian demand management using public works to fine-tune the cycle

Explanation

The neoliberal turn favoured market liberalisation: deregulation, privatisation, trade opening and priority to price stability, with monetary targets in the early monetarist phase. India's 1991 reforms dismantled licensing and lowered tariffs. The other options describe interventionist or Keynesian approaches.

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