What Is the Advantage of a Policy of Import Substitution

question 2

Multiple Choice

What is the advantage of a policy of import substitution?

• A)setting up an industry to replace imports minimizes risk of failure because the market for the product already exists in the nation as evidenced by the nation's imports of the commodity
• B)It is easier for developing nations to protect their domestic market against foreign competition than to force developed nations to lower their trade barriers against their manufactured exports
• C)foreign firms are induced to establish tariff factories to overcome the tariff wall of developing nations
• D)all of the above.

---

Definitions:

Intermediate Value

A mathematical concept stating that a continuous function must take on every value between any two values it assumes at any points in the domain.

Squared Values

Numbers that have been multiplied by themselves.

Cost-To-Benefit Analysis

A systematic approach to estimating the strengths and weaknesses of alternatives in terms of costs and benefits.

Numeric Ratio

A comparative figure showing the relative sizes of two quantities expressed as a quotient.