Which of the following is true of import substitution?
A)The government encourages domestic producers to make products which can compete in the international market.
B)The government takes steps to liberate imports and lift restrictions.
C)The government takes steps to promote exports and subsidizes export-oriented production.
D)The government insulates domestic producers by imposing strict tariffs and quotas.
E)The government focuses on service-oriented imports rather than primary imports.

Question

Quizplus · Accepted Answer

Import substitution is a trade and economic policy that seeks to reduce a country's foreign dependency through the development of domestic industries. It does this by imposing strict tariffs and quotas on imports so that domestic producers can capture a larger share of the domestic market. Therefore, option D is the correct answer.

Which of the Following Is True of Import Substitution