Which of the following correctly identifies the difference between export promotion and import substitution as approaches to economic growth?

A) Export promotion is based on the infant industry argument,while import substitution is based on the level playing field argument.
B) Export promotion requires more government intervention in the form of tariffs and quotas,while import substitution requires minimum government intervention.
C) Export promotion boosts domestic efficiency,while import substitution leads to inferior products being supplied by domestic producers and lowers efficiency.
D) Export promotion results in the replacement of low-cost foreign goods with high-cost domestic goods,while import substitution leads to the replacement of high-cost foreign goods with low-cost domestic goods.
E) Export promotion results in a decrease in the per capita GDP of a country,while import substitution results in an increase in the per capita GDP of a country.

Question

Caleb Ripley · Accepted Answer

Final Answer : C, Explanation :  Export promotion focuses on encouraging domestic industries to compete in international markets, thereby increasing efficiency through global competition. In contrast, import substitution aims to replace foreign imports with domestic production, which can lead to inefficiency and lower-quality products due to reduced competition and the protection of domestic industries.

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