To protect certain fledgling industries ...

[II]

How would you approach this question ...

[sudhir3127]

How would you approach this question ...

I would go for A.

the question tells that in order to protect the domestic industries . the govt banned imports. which implies that import products were cheaper than domestic products, otherwise why will be the goverment try to protect the fledgling industries. . thus once these imports are stopped naturally the cost to the buyer/expoters will be high in the doemstic market.

A clearly brings this out.

[raunekk]

This is an inference question so the first things needs to be done is "stop assuming" (atleast tats what i generally do):)

P1:To protect some fledgling industries,country Z stopped some imports.

p2:As a result , prices of those products went up and the buyers
(exporters) lost their ability to compete in export market.

here , as general tendency,we start assuming what all can be the causes of the increase in prices of those products.We dont need to!!!


So ,if the imports were stopped and prices went up...
means that..

1) only the products that were made in country Z itself are available in the market.
2)if the prices are up, that means,the cost of the same products were already higher than the those which were imported and as no option was left, exporters were forced to buy them at high prices..

A says exactly this..

thanks..
i hope this helps..

[peter.p.81]

I agree with you guys. I also think that the right answer is A