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

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Definitions:

Relaxed

A state or condition of being free from tension, stress, or anxiety.

Democratic Groups

Groups that operate under the principle of democracy, where decisions are made collectively and each member has an equal vote or say.

Productive

Yielding positive results or benefits; effective in achieving intended outcomes.

Aggression

A range of behaviors that can result in both physical and psychological harm to oneself, others, or objects in the environment.