Comparative Advantage

AEC 309: International Agriculture and World Food Needs
FINAL - December 20, 2002

Answer each question carefully and thoughtfully. Have a wonderful holiday!

Multiple Choice: 3 points each

_____1. Import substitution policies were designed to
a. allow colonial powers to further exploit the natural resource base of many developing countries
b. rely on imported manufactured goods to stimulate economic growth
c. substitute raw agricultural goods with processed foods
d. replace imports with (protected) domestic production to increase a country’s self-sufficiency

_____2. Import substitution policies resulted in
a. foreign exchange shortages and stagnant economic growth
b. the diversion of resources to meet the needs of the export market
c. undervalued exchange rates
d. increasing terms of trade
e. all of the above

_____3. Reverse Linkages are
a. the conversion of BOP deficits to foreign exc...