Import Substitution: Advantages and Disadvantages

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What is the main disadvantage of Import Substitution as a development strategy?

Lower average marketing cost

Dependency on the government for support (correct)

Higher quality local products

Limited market competition

Which argument supports Import Substitution as a development strategy?

Higher inflow of foreign currency

Lower raw materials cost

Higher standard of living (correct)

Lower unemployment rate

What is the main focus of Export Promotion as a development strategy?

Substitute imports with domestic production

Leverage comparative advantage in global markets (correct)

Promote rapid industrialization through high trade barriers

Encourage importation for variety

Which argument supports Export Promotion as a development strategy?

Higher inflow of foreign currency Signup and view all the answers

What is the Infant Industry Argument in the context of trade policies?

Protecting new industries from international competition until they become established and competitive Signup and view all the answers

Which aspect does Import Substitution aim to address?

Limiting market competition Signup and view all the answers

What distinguishes the development strategy of Export Promotion from Import Substitution?

Emphasis on comparative advantage in global markets Signup and view all the answers

What is a common misconception about Import Substitution as a strategy?

Emphasis on free trade and foreign competition Signup and view all the answers

How does Export Promotion contribute to social welfare?

By improving standard of living through better choices and quality of life Signup and view all the answers

Which strategy advocates for setting high trade barriers to protect local industries?

Import Substitution Signup and view all the answers

Import Substitution: Advantages and Disadvantages

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Questions and Answers

What is the main disadvantage of Import Substitution as a development strategy?

Which argument supports Import Substitution as a development strategy?

What is the main focus of Export Promotion as a development strategy?

Which argument supports Export Promotion as a development strategy?

What is the Infant Industry Argument in the context of trade policies?

Which aspect does Import Substitution aim to address?

What distinguishes the development strategy of Export Promotion from Import Substitution?

What is a common misconception about Import Substitution as a strategy?

How does Export Promotion contribute to social welfare?

Which strategy advocates for setting high trade barriers to protect local industries?

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