PRC-3 · Chapter 20 · Question 8 of 30
A developing country establishes a new microchip industry. The government argues that this industry must be protected from fierce international competition by high tariffs until it grows large enough to achieve economies of scale. This is the:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Infant industry argument
Explanation
The infant industry argument justifies temporary trade protection for newly established, fragile domestic industries until they mature and can compete globally.
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