What impact does import substitution have on the balance of payments?
A)Negative, the balance of payments can deteriorate
B)Positive, the balance of payments can improve
C)None, the balance of payments does not change
D)Unpredictable, the impact depends on the circumstances and imports

Question

Quizplus · Accepted Answer

Import substitution can improve the balance of payments by reducing the need for imports, thereby decreasing the outflow of foreign currency and potentially improving the trade balance.

What Impact Does Import Substitution Have on the Balance of Payments