When a developing country relies on import substitution,_____.
A)it capitalizes on the gains from specialization and comparative advantage
B)it replaces high-cost domestic goods with low-cost foreign goods
C)domestic producers,shielded from foreign competition,usually become more efficient
D)other countries often retaliate with their own trade restrictions
E)it concentrates on producing only for the international market

Question

Quizplus · Accepted Answer

Import substitution strategies, which focus on producing goods domestically to reduce imports, can lead to trade tensions. Other countries may respond to these protectionist measures by imposing their own trade restrictions, retaliating against the country pursuing import substitution.

When a Developing Country Relies on Import Substitution,_____