After a Policy of Import Substitution Has Begun,a Developing Country

question 45

Essay

After a policy of import substitution has begun,a developing country finds that employment has not risen significantly and that urban unemployment seems to be rising.Explain how these developments might be connected.

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Definitions:

Price Decreases

Refers to a reduction in the price of goods or services, often due to supply and demand factors.

Price Ceiling

A government-imposed limit on how high a price is charged for a product, intended to protect consumers from high prices.

Government

The organization or system of organizations exercising authority and performing functions in a society or part of it.

Socially Optimal

A condition where resources are allocated in a way that maximizes the overall welfare or well-being of society.