A Problem Encountered When Implementing an "Infant Industry" Tariff Is

question 84

Multiple Choice

A problem encountered when implementing an "infant industry" tariff is that

• A) domestic consumers will purchase the foreign good regardless of the tariff.
• B) special interest groups may prevent the tariff's removal when the industry matures.
• C) most industries require tariff protection when they are mature.
• D) labor unions will capture the protective effect in higher wages.

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Definitions:

United States-Mexico-Canada Agreement (USMCA)

A trade agreement between the United States, Mexico, and Canada that replaced NAFTA, aimed at reducing trade barriers and promoting North American economic growth.

North American Free Trade Agreement (NAFTA)

A trilateral trade agreement between Canada, Mexico, and the United States to reduce trade barriers and promote economic integration.

Economic Development

The process of improving the economic well-being and quality of life for a community, by increasing jobs and wealth and creating a stable economic base.

Vitality of the Economy

An indication of how dynamic, robust, and prosperous an economy is, often measured by factors like growth rates, employment levels, and innovation.