One of the Main Reasons Why Many Economists Remain Critical

question 77

Multiple Choice

One of the main reasons why many economists remain critical of the infant industry argument is its reliance on the assumption that

• A) protection of manufacturing from foreign competition is harmful.
• B) absolute advantage cannot sustain productivity of an industry.
• C) foreign firms too come under the definition of infant industry when they newly enter a foreign market.
• D) firms are unable to make efficient long-term investments by borrowing money from the domestic or international capital markets.
• E) foreign competition will eventually cause domestic firms to improve the quality of their products.

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Definitions:

Trivial Items

Objects or issues of little importance, value, or significance, often considered to be minor or insignificant details.

Minor Issues

Small problems or concerns that are not considered significant.

Reciprocating Concessions

The negotiation strategy of making concessions to the other party who in turn makes concessions to you, fostering cooperation and compromises.

Calculated Incompetence

A strategic behavior where an individual pretends or exaggerates their inability to perform a task in order to avoid responsibility.