A Problem Associated with Import Substitution as an Industrial Policy

question 58

Multiple Choice

A problem associated with import substitution as an industrial policy is:

• A) it removes the incentive for industries to be efficient.
• B) industries are often chosen for political, not economic, reasons.
• C) it often stays in place long after it was expected to lapse.
• D) All of these are problems associated with import substitution policy.

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Definitions:

New Venture

The act of embarking on a new business endeavor that typically involves risk and innovation.

Value

The importance, worth, or usefulness of something to a consumer, often reflected in their willingness to pay for a product or service.

Technological Component

Refers to the technical elements or aspects in a system, product, or process, often involving hardware, software, or both.

Customers' Lifestyles

The way in which a target group of customers lives, including their habits, preferences, and social trends, which influences their buying decisions.