Protecting a country's "infant" industries
A. seems to hurt the economy in practice because consumers of that industry's products are denied access to low-cost or higher-quality imports.
B. will hurt the protected industry in the short run but generate growth for that industry in the long run.
C. encourages short-run competition with the protected industry so that the industry will be forced to become efficient more rapidly.
D. leads to long-run growth in most cases because the industries are given a chance to be competitive.
Answer: A
You might also like to view...
What is the difference between the utility function of a risk averse person and a risk neutral person
Betty goes out to enjoy a bouffe with her friend instead of practicing calculus problems for her maths examination that is due the following day. This implies that the opportunity cost of the bouffe to Betty is zero
a. True b. False Indicate whether the statement is true or false
The transmission mechanism in an economy alters: a. nominal gross domestic product through changes in the interest rate. b. real gross domestic product through changes in the interest rate
c. real gross domestic product through changes in the price level. d. nominal gross domestic product through changes in the price level.
Whenever a nation has substantial external debts and assets denominated in foreign currency:
A) it is easier to manage, since changes in value are often offsetting. B) there can be large and destabilizing wealth effects. C) its interest payments on the debt will be matched by interest earnings on the assets. D) the risk of default becomes very large.