If a government pursues the industrial policy of import substitution, it is:

Question

Quizplus · Accepted Answer

Import substitution is a strategy whereby a government promotes domestic production of goods and services that are traditionally imported, in order to reduce reliance on foreign imports and to protect domestic industries until they become efficient enough to compete in the international market. This strategy involves imposing barriers to imports or giving preferential treatment to domestic producers. Therefore, choice A, protecting domestic industries until they are efficient enough to compete in the world market, is the correct answer.

If a Government Pursues the Industrial Policy of Import Substitution