One Problem with the Infant Industry Argument Is That in Developing

question 6

Multiple Choice

One problem with the infant industry argument is that in developing nations:

• A) frequent changes in government tend to make protection permanent.
• B) it is often difficult to remove or rescind the protection once it is granted.
• C) most industries could qualify as an infant industry.
• D) All of these are problems.

---

Definitions:

Profitability Index

A financial tool used to evaluate the desirability of an investment, calculated as the present value of future cash flows divided by the initial investment.

Accepted

Acknowledged or approved, typically in the context of an agreement or transaction.

Discount Rate

The discount rate is the interest rate used in discounted cash flow (DCF) analysis to present value future cash flows and assess the attractiveness of an investment.

Net Present Value

An approach to determining the value of an investment by discounting future cash flows to their present value.