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

Question 69

Multiple Choice

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


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

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