The infant-industry argument states that temporary trade protection is needed to protect a new industry against competition from more established and efficient foreign firms.

Question

Quizplus · Accepted Answer

The statement accurately describes the infant-industry argument. It suggests that new industries need protection from competition with established foreign firms to grow and become more efficient. This temporary protection can include various forms of trade barriers, such as tariffs or quotas, to level the playing field and allow the domestic industry time to gain a foothold in the market. Once the industry matures and becomes competitive, the protection can be removed.

The Infant-Industry Argument States That Temporary Trade Protection Is Needed