Question

Export production and import substitution

Answer 1

The idea behind this is to raise the price for domestic substitutes for the imported goods. The increased price provides greater incentives for production for the home market by domestic firms relative to production for foreign markets (exports).

Answer 2

Export production means to encourage export of domestic goods for profit .

The main objective of the import substitution is to increase the economy of one's own country.

Import Substitution means the substitution of import of foreign goods and using more of domestic or local goods.

This is especially essential for the economic good .

Other Objectives of import substitution and export production

⇒ They used to conserve economy in a country .

⇒ To prevent trade .

⇒ To promote economic development in a nation .

⇒ To promote employment .

⇒ To do away with social and economic problems .