Long-term economic growth, International Economics

Assignment Help:

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.


Related Discussions:- Long-term economic growth

Explain purchasing power parity, Q. Explain Purchasing Power Parity...

Q. Explain Purchasing Power Parity. Answer: PPP () states that the exchange rate between two countries' currencies equals the ratio of the countries' price levels.

Trade theory, discuss the possibility of trade if factor endowment are iden...

discuss the possibility of trade if factor endowment are identical and tasde is different

Self-fulfilling expectations, Q. "It is in the interest of each depositor ...

Q. "It is in the interest of each depositor to withdraw her money from a bank if all other depositors are doing the same, even when the bank's assets are sound." Discuss. As par

Explain the heckscher-ohlin model and ho model , 1. Explain Pierre Bourdieu...

1. Explain Pierre Bourdieu's concepts of field, habitus, doxa, and symbolic violence. How do these concepts clarify the continued dominance of neoclassical analysis in mainstream e

Transportation economic, Hepburn’s Speed Model, the coefficients of vehicle...

Hepburn’s Speed Model, the coefficients of vehicles are indicated for C and D. As the chief of operations in your organization, you are responsible for presenting the yearly budget

Adam Smith theory of absolute advantage.., Critically evaluate the theory a...

Critically evaluate the theory and outline the necessary assumptions for the theory to hold in it''s purest form

Why heckscher-ohlin theory called factor-proportion theory, Q. Why is the ...

Q. Why is the H.O. model called the factor-proportion theory? Answer: The H.O. model survey the limitations and the nature of presumptuous that the sole determinant of compar

Tariffs, Are tariffs harmful are necessary to maintain fair trade?

Are tariffs harmful are necessary to maintain fair trade?

Explain effects of permanent increase in u.s. money supply, Explain the eff...

Explain the effects of a permanent increase in the U.S. money supply in the short run and in the long run.  Assume that the U.S. real national income is constant. A raise in th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd