The infant industry argument is based on the idea of
A)global comparative advantage.
B)global absolute advantage.
C)tariff maximization.
D)learning-by-doing.
E)tariff minimization.

Question

Quizplus · Accepted Answer

The infant industry argument is based on the idea of learning-by-doing, which suggests that new industries in developing countries need protection in the form of tariffs or subsidies to allow them to gain experience, acquire technology, and achieve economies of scale before they can compete on a level playing field with established industries in developed countries. This argument assumes that the comparative advantage of developing countries can be enhanced through protectionism and that over time, the need for protection will decrease as the industry becomes more competitive.

The Infant Industry Argument Is Based on the Idea of