The idea that tariffs should be imposed to protect new and developing industries is referred to as
A) the start-up argument.
B) the infant industry argument.
C) the incubator business theory.
D) the new markets theory.
Answer: B
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Consider a production possibility frontier with books and tables. A combination of 1000 books and 500 tables is on the frontier. Which of the following are true?
i. Production of 700 books and 400 tables is attainable but inefficient. ii. Production of 1000 books and 600 tables is unattainable. iii. Production of 500 books and 1000 tables is inside the frontier. A) i, ii and iii B) i only C) i and iii D) ii and iii E) i and ii
C = 2,550 + (mpc)y
I = 800 G = 1,100 NX = 50 If the equilibrium level of GDP is $11,250, using the equations for C, I, G, and NX shown above, find the value of the marginal propensity to consume. What will be an ideal response?
Which of the following is a simplifying assumption associated with the short-run Keynesian model of equilibrium real Gross Domestic Product (GDP) determination?
A) Gross private domestic investment exceeds net private domestic investment. B) Most business profits are distributed to shareholders. C) Businesses pay indirect taxes. D) There is no depreciation.
Using Figure 2 below, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE1 might be:
A. wealth level decreases.
B. interest rates decrease.
C. expected profitability of investments increase.
D. domestic income decreases.