A Basic Problem with the Infant-Industry Argument Is That

question 136

Multiple Choice

A basic problem with the infant-industry argument is that

• A) most industries need protection when they are mature, not when they are first established.
• B) the amount of the tariff is unlikely to have much impact on the success of an infant industry.
• C) political pressure will likely prevent the withdrawal of the tariff when the industry matures.
• D) domestic consumers will continue to buy the foreign products anyway, regardless of the tariff.

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Definitions:

Residual Value

The market value of the leased property at the expiration of the lease. The estimate of the residual value is one of the key elements in lease analysis.

Financing Decision

The process of making choices about obtaining capital and using it to fund business activities, including investments and operations.

Capital Budgeting Decision

A capital budgeting decision involves the process of deciding whether to pursue a long-term investment or project based on its potential financial returns.

Lease Financing

A method of financing where a firm obtains the use of certain assets through leasing, avoiding the need to invest capital in them.