Which example describes import substitution?

Import substitution refers to a strategy aimed at reducing dependency on imported goods by encouraging the production of similar products locally. This can involve creating local versions of goods that are typically imported, thereby promoting domestic industries and potentially leading to job creation and economic growth within a country.

The highlighted example is correct because it clearly illustrates the concept of import substitution. By creating a local version of an imported product, a country can meet domestic demand without relying on foreign supplies. This approach not only helps retain economic value within the country but also fosters innovation and skill development in local industries.

The other examples do not align with the concept of import substitution as closely. Developing new technology for existing products pertains more to innovation and advancement rather than replacing imports. Buying products from local manufacturers only could imply a focus on local sourcing but doesn’t specifically emphasize the substitution of an imported item. Exporting goods to other countries relates to international trade rather than the internal reduction of imports. Each of these options addresses different economic strategies, but only the creation of a local version of an imported product directly embodies the principles of import substitution.