The Japanese economic model created strong domestic industries through subsidies from its Ministry of Trade and by closing off competitive foreign firms to its domestic market. This strategy promised to help economic growth by incubating domestic industries. New Japanese industries could count on a known local demand and would be protected from competition from abroad by tariffs and other barriers. It also ensured steady profits to local manufacturers as they had enough control over the prices of commodities in absence of foreign competition. The program could reduce the amount of imports and therefore improve the nation's balance of trade. What can we conclude from the above passage?

A A protectionist policy will create animosity among other nations.

B Government policy support greatly helps to create domestic industries.

C Restricting foreign competition contributes to improvement of quality in the domestic sector.

D Balance of trade means to increase import and reduce export.

Solution

Correct Answer: Option B

Solution

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