A Problem That Can Arise in Using Trade Protectionism to Develop

question 7

Multiple Choice

A problem that can arise in using trade protectionism to develop international competitiveness for a domestic industry is that ________.

• A)it is difficult to identify industries that have a high probability of reaching competitiveness
• B)assistance should be given only if entry barriers to new firms are very low
• C)the protecting countries lose too much revenue from import duties
• D)a short product life cycle makes the industry quickly noncompetitive

---

Definitions:

Interest Payable

This refers to the amount of interest expense that a company owes to its creditors, which has been incurred but not yet paid.

Calendar Year

An accounting period that extends from January 1 to December 31.

Annual Interest Accrual

The amount of interest that accumulates on a financial obligation over the course of a year.

Bonds Issuance

The process of offering bonds to investors as a means of raising capital for the issuer.