WAEC 2020 Economics · Question 9

In order to discourage the importation of manufactured goods, a country should adopt

Options

  1. A.import promotion strategy
  2. B.export led strategy
  3. C.liberal foreign exchange
  4. D.import substitution strategy

Answer: D. import substitution strategy

Explanation written with AI and checked against the answer key

Step 1: Analyze the question The question asks which policy a country should adopt to discourage the importation of manufactured goods. So we need a strategy that reduces imports by encouraging local production.

Step 2: Explain the concept Import substitution industrialization (ISI) is a strategy where a country produces locally the goods it previously imported. Governments usually support it with tariffs, quotas, subsidies to local industries, and foreign exchange controls. The aim is to reduce dependence on imports, save foreign exchange, create jobs, and build local industries. Nigeria used this approach in the 1960s-1980s.

Step 3: Evaluate each option

  • A. Import promotion strategy: This would encourage more imports, which is the opposite of what is wanted.
  • B. Export led strategy: This focuses on boosting exports to earn foreign exchange. It does not directly discourage imports.
  • C. Liberal foreign exchange: Relaxing foreign exchange controls makes it easier and cheaper to buy imports, so imports would likely increase.
  • D. Import substitution strategy: Local industries produce the goods instead of importing them, so imports of manufactured goods fall. This fits the question.

Step 4: Answer The correct option is D. Import substitution strategy.

Tip: Link the words in the question to the strategy name: "discourage imports" means "substitute imports" with local goods. Remember: Import substitution = produce at home what you used to buy abroad. Also remember that "promotion" and "liberal" policies usually increase trade, while "protection" and "substitution" reduce imports.

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