PKP's move from a managed economy to liberalized policy was characterized by which approach?

• A. Immediate full liberalization with no state role
• B. Return to centrally planned economy
• C. Gradual deregulation, privatization, and market-oriented reforms aimed at attracting investment and growth
• D. No policy change

Answer: (C)

Transitioning from a managed economy to a liberalized policy is about guiding the shift from heavy state control toward market-based rules and incentives. The best description matches a gradual program of deregulation, privatization, and market-oriented reforms designed to attract investment and spur growth. In practice this means easing price controls, reducing state subsidies, privatizing state-owned enterprises, encouraging competition, and strengthening the frameworks that protect property rights and attract both domestic and foreign investment, all while stabilizing the macroeconomy.

Why this fits: a gradual approach acknowledges the need to build institutions, avoid sharp shocks, and create a predictable environment for investors, which supports sustainable growth. In contrast, an immediate full liberalization with no state role would be destabilizing, a move back to a centrally planned system contradicts liberalization, and doing nothing would not reflect the described shift.