When a Developing Country Relies on Import Substitution

question 83

Multiple Choice

When a developing country relies on import substitution,

• A)it sacrifices the gains from specialization and comparative advantage
• B)replaces low-cost foreign goods with high-cost domestic goods
• C)domestic producers, shielded from foreign competition, usually fail to become efficient
• D)other countries often retaliate with their own trade restrictions
• E)All of the answers are correct

Comprehend the relationship between GDP growth, population increase, and the standard of living.

Recognize the role and importance of productivity in influencing a nation's standard of living.

Know the average growth rate of real GDP per capita in specific historical periods of the United States.

Understand the effects of research and development on the quality and quantity of labor and capital goods.

---

Definitions:

Subsidiaries

Companies that are fully or partially owned and controlled by another company, known as the parent company.

Transaction Costs

Expenses incurred during the exchange of goods or services, beyond the price of the goods or services themselves.

Integrative IHRM Approach

A holistic method in international human resource management that combines several aspects of HR practices across multiple countries to achieve global objectives.

Home HR Practices

Human resources policies and practices that are applied within an organization, tailored to its culture and operational requirements.