Describe the policies that would be associated with Import Substitution Industrialization. What are the primary criticisms of these policies?
What will be an ideal response?
Replacing imported manufactured goods with domestically produced products is the basis of import substitution. Tariffs and other trade restrictions were used, the government created or supported new industrial development, and in general the policies were aimed at reducing the need for foreign exchange earnings. Criticisms include that governments misallocate resources when they become too involved in the production process. Exchange rates were often overvalued. The policies favored urban over rural areas. Inequality often worsened. There was widespread rent seeking activity.
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Discouraged workers are ________ in the unemployment rate, and this tends to ________ the unemployment rate
A) counted; overstate B) counted; understate C) not counted; overstate D) not counted; understate
Refer to Figure 5-15. The current market equilibrium output is partly the result of overfishing. In that case, what does S2 represent?
A) the private marginal cost of harvesting salmon B) the private marginal benefit of harvesting salmon C) the social marginal cost of harvesting salmon D) the social marginal benefit of harvesting salmon
Identify each of the following acts as representing either saving or investment
a. Fred uses some of his income to buy government bonds. b. Julie takes some of her income and buys mutual funds. c. Alex purchases a new truck for his delivery business using borrowed funds. d. Elaine uses some of her income to buy stock in a major corporation. e. Henrietta hires a builder to construct a new building for her bicycle shop.
In general, the demand curve facing the monopolistically competitive firm is more elastic than the demand curve facing the monopoly.
Answer the following statement true (T) or false (F)