The Infant Industry Argument Is Valid When

question 215

Multiple Choice

The infant industry argument is valid when

• A)a new industry is suffering financial losses.
• B)a new industry is less efficient than foreign competitors.
• C)the industry's prospective gains are sufficient to repay the social losses incurred while it is being protected.
• D)the industry is not likely to be profitable in the future.

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Definitions:

Closing Entries

Entries recorded at the close of an accounting period for the purpose of moving balances from temporary to permanent accounts.

Capital Account

An account showing the net worth of a business at a specific point in time, including assets contributed by owners and profits.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and equity at a specific point in time.

Permanent Accounts

Accounts that carry their ending balances from one accounting period to the next, including assets, liabilities, and equity accounts.