1.The reason "Import substitution" is the correct answer is because this policy approach is designed to foster domestic industrial development by encouraging the production of goods that were previously imported. It is often used by governments to reduce their dependency on foreign imports and build a self-sustaining domestic industrial base.

2.Under import substitution, the government may implement various measures to protect and promote domestic industries, such as imposing tariffs on imports, providing subsidies to domestic producers, and implementing trade barriers to make it more expensive or difficult for foreign goods to compete with domestic ones. 

3. The ultimate goal is to reduce a country's reliance on imported goods and promote the growth of its own industries, which can lead to economic development and self-sufficiency.