What is the main reason why import-substitution strategies fail to generate rapid economic growth?
A)Deteriorating terms of trade
B)Scarce natural resources
C)Inefficient allocation of resources
D)Lack of self-interested behavior by entrepreneurs
E)Insufficient subsidies to domestic producers

Question

Quizplus · Accepted Answer

Import-substitution strategies often allocate resources inefficiently, leading to high production costs and lower quality goods. This can result in reduced competitiveness in international markets and failure to generate rapid economic growth. Additionally, protectionist policies can create a lack of incentive for businesses to innovate and invest in technology, further hindering economic growth.

What Is the Main Reason Why Import-Substitution Strategies Fail to Generate