Explain the infant industry argument
What will be an ideal response?
The infant industry argument is an argument for tariff protection for a domestic industry that is relatively new. If there are economies of scale or benefits from experience, the industry may not have a chance to develop and secure either experience or economies of scale if they face competition from established foreign firms. The argument is that after a period of time, the industry would be able to compete without tariff protection.
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A bond is:
A. a financial asset that represents partial ownership of a company. B. a payment made periodically to all shareholders of a company. C. an agreement in which a lender gives money to a borrower in exchange for a promise to repay the amount loaned plus an agreed-upon amount of interest. D. a promise by the bond issuer to pay a lump sum at a specified maturity date, and, in some cases, to pay periodic interest at a specific percentage rate.
Other things equal, an increase in the consumer confidence index tends to raise the average propensity to consume
a. True b. False Indicate whether the statement is true or false
Compared to the natural rate of unemployment, the actual unemployment rate is:
A. always higher. B. always lower. C. always the same. D. higher in periods when GDP fails to grow at its normal rate.
Which of the following does not cause exchange rate fluctuations?
a. Changes in absolute international expectations but not relative international expectations. b. Central bank interventions in the foreign exchange market. c. Changes in relative international expectations. d. Relative international price levels. e. Changes in relative international incomes.