One of the drawbacks of implementing an import-substitution policy is that:
A)it makes other countries impose trade restrictions as a retaliatory measure.
B)it makes the economy vulnerable to global economic fluctuations.
C)it leads to brain drain,by which educated and knowledgeable resources are lost.
D)it increases the dependence on foreign capital goods for economic growth.
E)it increases the budget deficit of the domestic country.

Question

Quizplus · Accepted Answer

Import-substitution policies, which aim to replace foreign imports with domestic production, can lead to retaliatory trade restrictions from other countries. These countries may respond to the loss of their export markets by imposing their own trade barriers against the country implementing import substitution, potentially leading to a trade war and reduced international trade.

One of the Drawbacks of Implementing an Import-Substitution Policy Is