An Example of the "Infant Industry" Argument for Trade Protection

question 15

Multiple Choice

An example of the "infant industry" argument for trade protection is that

• A)tariffs should be implemented in order to improve the terms of trade and thereby maximize the gains from trade.
• B)tariffs should not be imposed on countries that have democratic governments.
• C)in the presence of unexploited scale economies,tariff protection may permit a country to develop future comparative advantage in certain products.
• D)imports of certain products should be limited in the interests of national defence.
• E)"strategic" trade policy is helpful when other countries are also being strategic.

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