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JAMB Economics 2006 Question 30

Question 30

International Trade

Import substitution policy is used to

  1. A.protect local industries
  2. B.check government expenditure
  3. C.correct the balance of payments problem
  4. D.encourage increased volume of trade
Show the answer and explanation

Answer: C (correct the balance of payments problem)

Explanation

Producing at home what was once imported cuts the import bill, which helps correct a balance of payments deficit.