Which statement best contrasts ISI with EOI?

• A. ISI protects domestic capacity and substitutes imports domestically to build capacity; EOI emphasizes exporting and global integration.
• B. ISI aims at exporting manufactured goods.
• C. EOI protects domestic industries.
• D. There is no policy difference between ISI and EOI.

Answer: (A)

The main idea being tested is how two development strategies differ in their policy focus. Import-substitution industrialization aims to build domestic industries by substituting imports with locally produced goods, often using tariffs, quotas, and state support to nurture and protect new industries until they can compete at scale. Export-oriented industrialization, on the other hand, concentrates on pushing production toward international markets, integrating with global trade, and creating conditions that make exports competitive.

That’s why the statement describing ISI as protecting domestic capacity and substituting imports to build capacity, while EOI emphasizes exporting and global integration, is the best contrast. The other options mix up the goals—ISIs aren’t primarily about exporting manufactured goods, and EOIs aren’t about shielding domestic industries—so they don’t capture the true distinction between the two approaches.