Which of the following statements is true of the infant industry theory?
A) It argues that adoption of the free trade policy is the best way to empower infant industries.
B) It proposes the idea that new industries generate more revenue than existing ones.
C) It states that all new industries need to be well established from the start to compete against foreign firms.
D) It argues that certain emerging industries need to be protected for a period of time.

Question

Quizplus · Accepted Answer

The infant industry theory suggests that emerging industries may need temporary protection from international competition to develop and become competitive. This can involve tariffs, quotas, or other trade barriers to shield the nascent industries from established foreign competitors.

Which of the Following Statements Is True of the Infant