Which of the Following Describes Import Substitution

question 35

Multiple Choice

Which of the following describes import substitution?

• A) changing from one foreign supplier to another
• B) replacing locally produced goods with imports
• C) manufacturing goods that had been previously imported
• D) exporting and importing the same type of product

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Definitions:

Arbitrageurs

Traders who seek to profit from price discrepancies of the same asset in different markets, buying low in one market and selling high in another.

Speculator

Someone who buys or sells foreign exchange in hopes of profiting from fluctuations in the exchange rate over time.

Exchange Rate

How much one currency is worth in terms of crossing over to another currency.

Mexican Demand Curve

A graphical representation showing the quantity of goods that consumers in Mexico are willing and able to purchase at various prices.