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

K-l intensity ratio in the production, Q. In autarky, Country P was produci...

Q. In autarky, Country P was producing at point 5. With trade, could its production point be found above or below point 5? Explain why. What must happen in the K/L intensity ratio

Germanys economic welfare, Q. At the conclusion of World War I, Germany, a...

Q. At the conclusion of World War I, Germany, as a punishment, was obliged to take a large transfer to France in the form of reparations. Is it possible that the actual reparation

Modes of Entry and Internalisation, Although the elegance and comprehensive...

Although the elegance and comprehensiveness of transactions costs reasoning has provided the internalisation approach with a powerful logic (Rugman, 1981, 1985), it is still defici

Criticism against hechscher-ohlin type trade theories, Criticism against He...

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

Show the phenomenon of overshooting, Q. Using the DD - AA framework, show t...

Q. Using the DD - AA framework, show the phenomenon of overshooting.  Use a figure to explain when it is taking place. Answer: The figure below illustrates the phenomenon of ov

#title.Economic indicators, I want to make a report on Econmomic indicators...

I want to make a report on Econmomic indicators in financial market

What factors lie behind capital inflows to developing world, Q. Wha...

Q. What factors lie behind capital inflows to the developing world? Answer: Several developing countries have received a lot of capital inflows that lead them to an

Situations when a tariff and a quota are not equivalent, Q. Economic theor...

Q. Economic theory in general and trade theory in particular are replete with equivalencies. For illustration, it is argued that for any specific tariff one can search an equival

Opportunity cost, what are the different forms of opportunity cost theory

what are the different forms of opportunity cost theory

Why under fixed exchange rate is ineffective, Q. Explain why under fixed ex...

Q. Explain why under fixed exchange rate, monetary policy is ineffective whereas under floating exchange rate it is effective in rising output. Answer:  In floating by purchasi

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