An Example of Infant Industry Protection Is the Computer Industry

question 141

Multiple Choice

An example of infant industry protection is the computer industry in Brazil from 1977 to 1988. It is widely concluded that the effort was:

• A) a failure.
• B) a complete success, because now Brazil manufactures nearly all computer CPUs.
• C) successful, although there were costs to pay in higher prices, making PCs unattainable for most Brazilian consumers.
• D) as measured on a cost-benefit basis, still unclear due to potential future gains.

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Definitions:

Usury Statute

Laws that set the maximum interest rates that can be charged on loans.

Maximum Rate

The highest allowable interest rate or charge on a loan or financial contract as specified by law.

Covenant Not to Compete

A clause in an employment or business agreement that prohibits one party from competing against another for a certain period and in a specific geographic area.

Reasonableness

A standard of fairness, appropriateness, and rationality often used in legal and ethical judgments.