Which statement correctly describes a key feature of export-led growth?

Which statement correctly describes a key feature of export-led growth?

• A. Emphasizes producing for foreign markets to generate foreign currency
• B. Focuses on import substitution and domestic market protection
• C. Reduces trade and opens the economy
• D. Centralizes all production in a single sector

Answer: (A)

Export-led growth aims to expand production for international markets to earn foreign currency and strengthen the balance of payments. By building export-oriented industries, a country leverages global demand to drive growth, often with policies that boost competitiveness, infrastructure, and investment. This is exactly what the statement captures: prioritizing outputs for foreign markets to generate foreign exchange. Other options describe different approaches: import-substitution focuses on protecting and developing domestic industries for the home market rather than earning foreign currency from exports; a mix that reduces trade contradicts the idea of exporting; and centralizing production in a single sector would limit diversification and isn’t characteristic of a broad export-led strategy.