Outward-oriented growth strategies emphasize
A) the allocation of resources according to the principle of absolute advantage.
B) the allocation of resources according to the principle of comparative advantage.
C) the principle of strategic trade policy.
D) the principle of industrial policy.

Question

Quizplus · Accepted Answer

Outward-oriented growth strategies are based on the principle of comparative advantage, which suggests that countries should specialize in the production of goods and services they can produce more efficiently than other countries and engage in international trade to maximize their gains. This approach is based on free market principles and helps countries to integrate into the global economy, increase their competitiveness, and benefit from economies of scale. Option A is incorrect because the principle of absolute advantage suggests that countries should specialize in the production of goods and services they can produce more efficiently than other countries, but it does not necessarily involve international trade. Option C is incorrect because strategic trade policy advocates for government intervention in the form of subsidies or other support measures to promote the growth of specific industries, which is different from the free market approach of outward-oriented growth strategies. Option D is incorrect because industrial policy refers to government strategies to promote and support the growth and development of specific industries, which may or may not involve international trade.

Outward-Oriented Growth Strategies Emphasize