Which Trade Strategy Have Developing Countries Used to Restrict Imports

question 9

Multiple Choice

Which trade strategy have developing countries used to restrict imports of manufactured goods so that the domestic market is preserved for home producers?

• A) international commodity agreement
• B) export promotion
• C) multilateral contract
• D) import substitution
• E) export subsidies

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Definitions:

Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services over time.

Real Wage

Adjusted for inflation, it represents the purchasing power of the wage rate.

Profit-Maximizing Firm

A company that operates in such a way as to maximize its profits by adjusting output levels based on market conditions.

Marginal Revenue Product

Refers to the additional revenue generated from employing one more unit of a resource or factor of production.