Which Industrialization Policy Used by Developing Countries Places Emphasis on the Comparative

question 294

Multiple Choice

Which industrialization policy used by developing countries places emphasis on the comparative advantage principle as a guide to resource allocation?

• A) Export promotion
• B) Import substitution
• C) International commodity agreements
• D) Multilateral contract

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Definitions:

Required Reserve Ratio

The fraction of deposits that banks are mandated by regulation to hold in reserve and not lend out.

Excess Reserves

The banks' reserves over and above the required minimum that they choose to hold rather than loan out.

Depositors

People or organizations that deposit their funds into a bank to secure them and gain interest as time passes.

Borrowers

Individuals or entities that take funds from a lender under the agreement to pay back the principal amount along with interest.