An important component of _____ is that it might pay governments to intervene in an industry if it helps domestic firms overcome the barriers to entry created by foreign firms that have already reaped first-mover advantages.

Question

Quizplus · Accepted Answer

The concept described in the statement is that of strategic trade policy, which argues that government intervention could be warranted to help domestic firms overcome foreign firms that have enjoyed first-mover advantages. Option A (tactical trade policy) refers to short-term policy initiatives focused on specific trade issues; option C (administrative trade policy) refers to bureaucratic rules and procedures that could affect trade; option D (comparative trade policy) is not a commonly used term; and option E (infant industry policy) is similar to strategic trade policy but focuses on supporting the growth and development of new domestic industries.

An Important Component of _____ Is That It Might Pay