Why do developing countries sometimes impose import restrictions ...

[Lisaclaire]

Why do developing countries sometimes impose import restrictions to increase their levels of industrialization?
 
  What will be an ideal response?

Question 2

When a company is seeking protection from imports, it can usually improve its chances of getting that protection if it allies with most of the companies in the industry.
 
  Indicate whether the statement is true or false

[amy.lauersdorf90]

Answer to Question 1

Countries with a large manufacturing base generally have higher per capita incomes than do countries without such a base. Moreover, a number of countries, such as the United States and Japan, developed an industrial base while largely preventing competition from foreign-based production. Many developing countries use protection to increase their level of industrialization because of industrial countries' economic success and experience. Specifically, they believe:
a. Surplus workers can more easily increase manufacturing output than they can increase agricultural output.
b. Inflows of foreign investment in the industrial area will promote growth.
c. Prices and sales of traditional agricultural products and raw materials fluctuate too much, harming economies that depend on too few of them.
d. Markets and prices for industrial products will grow faster than those for agricultural products.

Answer to Question 2

TRUE