Which of the following statements reflects the belief of the critics of industrial policy?
A)The government allocates scarce resources more efficiently than markets.
B)Industrial policy could evolve into a government giveaway program.
C)Industrial policy gives domestic industries a competitive advantage over important trading partners.
D)Industrial policy encourages unfavorable terms of trade with foreign countries.
E)Industrial policy overprotects the domestic producers.

Question

Quizplus · Accepted Answer

Critics of industrial policy believe that it could lead to the government picking winners and losers, which could result in government grants and subsidies being given out to favored industries, leading to inefficiency and resource misallocation.

Which of the Following Statements Reflects the Belief of the Critics