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.

Import-Substitution Policy

An economic strategy aimed at reducing dependence on imported goods by promoting domestic production of similar products.

Trade Restrictions

Measures implemented by a government to control or limit the import and/or export of goods and services, often to protect domestic industries.

Budget Deficit

The financial situation where a government's expenditures exceed its revenue over a specified period, leading to borrowing or the use of reserves.