The rationale for the infant-industry argument for trade protection is that ________.
A)incubator centers in which business, government, and academia cooperate will develop entrepreneurial companies
B)a country should give one firm in an industry a monopoly status so that it will grow large enough to be competitive internationally
C)it takes time for an industry to become competitive in world markets, so protection is needed to help this industry pass through the critical period
D)lower restrictions should be placed on products coming from countries where a government has a large sphere of political influence

Question

Quizplus · Accepted Answer

The infant-industry argument for trade protection states that young industries need protection from foreign competition until they reach a level of maturity that enables them to compete internationally. This is because it takes time for an industry to become competitive in world markets, so protection is needed to help this industry pass through the critical period. Choice A refers to an incubator center model, while choice B promotes a monopoly status for a single firm, neither of which explains the infant-industry argument for protection. Choice D refers to political influence, which is not related to the rationale of the infant-industry argument.

The Rationale for the Infant-Industry Argument for Trade Protection Is