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

Question 96

Multiple Choice

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


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

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