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

International trede, explain the newo clacical theory of international tred...

explain the newo clacical theory of international trede

Rasons for economic miracle of east asian countries, Q. Illustrate the rea...

Q. Illustrate the reasons for the economic "miracle" of the East Asian countries between 1960 and 1997. Is it only due to the common Asian practice of industrial policy and busin

Complete equalization of factor prices, Q. International trade leads to co...

Q. International trade leads to complete equalization of factor prices. Discuss. Answer : This statement is usually "true...but". Under a limited and strict set of assumpti

Explain why ems countries decided to fix their exchange rate, Q. Ex...

Q. Explain why the EMS countries decided to fix their exchange rates against the German DM? Answer: In this manner the other EMS countries in effect imported the credi

Discuss the relationship between ppp and law of one price, Discuss the rela...

Discuss the relationship between PPP and the Law of One Price. Answer:  The law of one price is applies to individual commodities while Purchasing Power Parity applies to the g

International monetary system during the post-world war, Q. How did the int...

Q. How did the international monetary system influence macroeconomic policy-making and performance during the post-World War II years during which exchange rates were fixed under t

Characteristics of human resources, Characteristics of human resources in t...

Characteristics of human resources in the International Medical Center are their diversity and versatility; we find jurisdiction in the field of advanced medicine, we find at the s

Evaluate how homes macroeconomic policies affect foreign, Q. Imagine a wor...

Q. Imagine a world with two large countries, Home and Foreign. Evaluate how Home's macroeconomic policies affect Foreign. Compare the small and the large country cases; consider

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