The infant-industry argument for protection is based on the idea of
A) learning-by-doing.
B) dumping.
C) absolute advantage.
D) quotas are the least harmful method of protecting domestic firms.
E) saving jobs in the U.S. economy.

Question

Quizplus · Accepted Answer

The infant-industry argument for protection is based on the idea of learning-by-doing. This argument holds that new industries in a country may need certain protections such as tariffs or subsidies in order to develop and compete with established industries in other countries. Over time, as these new industries gain experience and economies of scale, they become more efficient and can compete on a level playing field.

The Infant-Industry Argument for Protection Is Based on the Idea