Import Substitution (Grade 12 NSC Matric Economics): Flashcards
📚Flashcards
Practise the cards
10 cards from this deck
ShowHide
Practise the cards
10 cards from this deck
Import substitution definition
Import substitution definition
Locally producing goods previously imported from abroad
Import substitution effect on balance of trade
Import substitution effect on balance of trade
Positive effect
Import substitution reason: diversification benefit
Import substitution reason: diversification benefit
Strengthens manufacturing, reduces dependence on foreign goods
Import substitution reason: industrialisation effect
Import substitution reason: industrialisation effect
Increases tax revenues and creates employment
Import substitution method: tariffs
Import substitution method: tariffs
Taxes/customs duties on imported goods
Import substitution method: quotas
Import substitution method: quotas
Limits on quantity of specific imports
Import substitution method: subsidies
Import substitution method: subsidies
Financial support to domestic enterprises
Import substitution benefit: employment
Import substitution benefit: employment
Local industries expand and hire more workers
Import substitution drawback: competitiveness
Import substitution drawback: competitiveness
Protected industries become less efficient and innovative
Import substitution drawback: resource allocation
Import substitution drawback: resource allocation
Resources diverted from sectors with competitive advantage