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Q. It is argued that import substitution is a misguided trade policy if the intent is to show long-term economic growth. Illustrate the reasons underlying this argument.
Answer: Import substitution support that economic activity in which the country is relatively incompetent. This lowers the actual income at any given time and decreases the resources which are able to be used for investment purposes hence lower growth rates. A further answer is that import substitution by creating a protected domestic market is unsuccessful to provide incentives to produce high or world class quality - which signifies this country can't market in foreign countries. With such a perceived limited market endogenous economic growth will not be forthcoming. Finally it perhaps that exposure to world competition has its own dynamic effect promoting economic growth.
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Question : (a) Differentiate between Transaction, economic risk and Translation risk in foreign exchange market. (use an illustrative and numerical example in each case. (b)
alternative explanations to the theory of international trade.
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What are the benefit derived by Indian Corporates due to WTO - TRIPS?
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Criticism against Hechscher-Ohlin type trade theories is explained below: The foremost criticism leveled against Hechscher-Ohlin type trade theories are that they views compara
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