One problem with the infant industry argument is that
A) the protection is typically never removed, creating a domestic monopoly.
B) it fails to protect domestic industries from foreign competition.
C) it must be approved by the IMF and the World Bank.
D) it must be approved by the Federal Reserve Board.
Answer: A
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In the above figure, when real disposable income is less than 600, then
A) consumption is less than disposable income. B) consumption is the same as disposable income. C) consumption is more than disposable income. D) the MPC will fall.
If an average cost pricing rule is imposed on the firm in the figure above, the firm will produce
A) 5 units. B) 20 units. C) 30 units. D) 40 units.
According to international trade theory, a country should:
A. import goods in which it has an absolute advantage. B. specialize in the production of the good in which it has an absolute disadvantage. C. export goods when it has either a comparative or absolute disadvantage in producing them. D. specialize in the production of the good in which they have a comparative advantage.
Of the arguments for limiting trade, which one is the most appealing to economists?
A. protecting the profits of companies B. protecting an industry important to a nation's defense C. helping an industry that is in trouble D. protecting the jobs of citizens