The infant industry argument calls for active government involvement
A) only if the government forecasts are accurate.
B) only if some market failure can be identified.
C) only if the industry is not one already dominated by industrial countries.
D) only if the industry has a high value added.
E) only if the industry is independently able to earn high returns.

Question

Quizplus · Accepted Answer

The infant industry argument states that government intervention may be necessary to protect and nurture a new industry that is not yet competitive due to market imperfections, such as lack of access to capital or expertise. Therefore, the argument calls for government involvement only if some market failure can be identified. The other options are not necessarily requirements for infant industry protection.

The Infant Industry Argument Calls for Active Government Involvement