What Impact Does Import Substitution Have on the Balance of Payments

question 28

Multiple Choice

What impact does import substitution have on the balance of payments?

• A)Negative, the balance of payments can deteriorate
• B)Positive, the balance of payments can improve
• C)None, the balance of payments does not change
• D)Unpredictable, the impact depends on the circumstances and imports

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Definitions:

Compounded Monthly

Calculating interest earnings using both the initial principal and previously earned interest on a monthly basis.

Effective Annual Rate

The annual interest rate that accounts for compounding over a given period, providing a true reflection of financial costs.

Compounded Quarterly

Interest calculation method where the interest is added to the principal four times a year, enhancing the effect of compounding over time.

Effective Annual Rate

The interest rate on an investment or loan, calculated annually, that takes into account the effects of compounding.