Correct Option
The passage explicitly states that the basic philosophy underlying globalization emphasizes "absolute freedom to markets to determine prices and production and distribution patterns," and views "government interventions as processes that create distortions and bring in inefficiency." Therefore, according to the passage, government interventions are regarded as leading to distortions and inefficiency in the economy.
Incorrect Options
- Option 2 (optimum use of resources): The passage identifies government interventions as creating "inefficiency," which is contrary to the concept of optimum resource utilization. Within the globalization framework described, free markets, rather than government intervention, are posited to drive efficiency and optimal resource allocation.
- Option 3 (more profitability to industries): The passage does not suggest that government interventions lead to increased profitability for industries under the globalization paradigm. Instead, it advocates for market forces to govern economic outcomes, implying that interventions would impede, rather than enhance, market-driven profitability.
- Option 4 (free play of market forces with regard to industries): The passage clearly positions government interventions as antithetical to the "absolute freedom to markets." Interventions are viewed as creating distortions and inefficiency, thereby obstructing the free play of market forces, rather than facilitating it. The core tenet of globalization, as described, involves reducing state intervention to enable market forces.