Import substitution strategies for growth _________________. Involve the use of
ID: 1206134 • Letter: I
Question
Import substitution strategies for growth _________________.
Involve the use of trade barriers to keep out foreign competition in order to establish and protect domestic competition
Is an outward oriented approach to trade
Create incentives to improve domestic productive efficiency
Reduce the incentive to establish underground/black-market trade in protected products
Involve the use of trade barriers to keep out foreign competition in order to establish and protect domestic competition
Is an outward oriented approach to trade
Create incentives to improve domestic productive efficiency
Reduce the incentive to establish underground/black-market trade in protected products
Explanation / Answer
Answer: Involve the use of trade barriers to keep out foreign competition in order to establish and protect domestic competition.
Import substitution makes policies which makes the importation unattractive (for example: higher import duties) and also makes policies which are beneficial to the domestic producers (for example: incentives for local production)