Foreign Service Officer Test (FSOT) Practice Exam 2025 – All-in-One Prep Guide for Exam Success!

The assertion that living standards immediately rose following communism's collapse in Eastern Europe in 1989 is accurate because, in reality, many regions experienced significant economic challenges during the transition from a centrally planned economy to a market-oriented system. While the fall of communism initially provided a sense of freedom and hope for many citizens, the process of restructuring economies was fraught with difficulties, including unemployment, inflation, and the hardship of adjusting to new market dynamics.

In the immediate aftermath, many countries faced significant economic contractions and social unrest, as the shift from a controlled economy introduced volatility. This context illustrates why living standards did not rise immediately; they often degraded before eventually stabilizing and improving over a longer period, as reforms and new policies began to take effect.

The other statements highlight various challenges common in post-communist states. Industrial production may have been sustained due to existing infrastructure, but inefficient practices lingered from the previous regime. Governments were indeed pressured to implement economic stabilization measures as they faced the dual challenge of transitioning to capitalism while also managing public expectations. Lastly, the dramatic increase in prices can be attributed to the rapid liberalization of markets, leading to inflationary pressures as economies adjusted. Thus, these aspects collectively underscore the economic turmoil of the time rather