Suppose that X supports foreign direct investment in retail trade and relaxation of labour laws. One day he is discussingIndia’sbalanceofpaymentssituationwithhisfriends.It is showing a largedeficit in the current account. Analysis shows that large gold imports are a reason for the large deficit. They note that government is considering a proposal to restrict import of gold except for its use in making ornaments for exports.
What can one say would be a consistent stand for X to take in the discussion and why?
1. Xshouldsupport restrictions on goldimports as a means ofreducingcurrent account deficit in the balance of payments.
2. X should oppose any restrictions on imports of gold.
3. X though he may subscribe to economic reforms need not support all its elements.
4. X should not comment on the matter unless he has an interest in it.
The first answer choice will be inconsistent with X’s economic ideology. The first sentence of the case indicates that X supports reformist economic agenda. In this instance, one does not expect X to recommend that government should impose direct import controls to cut down gold imports. For that will be inconsistent with the logic or values underlying his other beliefs which together make up economic reform agenda. Economic reforms oppose direct intervention of government in economic sphere. They argue that market forces should have free play in the economy.
The second answer choice is correct since it is consistent with X’s ideology. It will be logically consistent with his belief system.
The third option is correct in one sense. Though one may adopt an ideology, he may not agree with all its tenets. But in this case, the question is about one consistent stand. Hence, the second answer choice has to be preferred.
Thefourthoptiondoes not answerthequestion.It goesoffthetangent andproposes an irrelevant answer.The answer hasto be in theterms of thequestion whichis about what would be X’sconsistent stand.