Consider the following two statements and select the bestanswer.I. The national security argument might be a valid argumentfor trade protection
II.Industries with spillover effects should be protected fromforeign competition.
A)I and II are both true.
B)I and II are both false.
C)I is likely to be true, and II is likely to be false.(True Answer )Correct
D)I is likely to be false, and II is likely to be true.

Question

Quizplus · Accepted Answer

The national security argument can be a valid reason for trade protection, but it is often abused for protectionist purposes. On the other hand, protecting industries with spillover effects (such as R&D or innovation) can have positive effects on the overall economy. However, such protection often leads to rent-seeking and inefficiencies. Therefore, while it is possible for both statements to be true, it is more likely that statement I is sometimes true but often misused, while statement II is sometimes true but can lead to inefficiencies.

Consider the Following Two Statements and Select the Bestanswer