The Main Problem with Using the Infant Industries Argument to Justify

question 109

Multiple Choice

The main problem with using the infant industries argument to justify protecting an industry from foreign competition is that:

• A) all industries will claim that they are infant industries in order to gain protection.
• B) the protected industry will become too efficient and drive out foreign competition.
• C) once in place, it is difficult to remove protection even as the industry matures.
• D) it causes the goods that are produced in the protected industry to have lower prices.
• E) this policy compromises national security if the infant industry produces military goods.

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