PRC-3 · Chapter 20 · Question 27 of 30
A developing nation establishes a fragile new microchip sector. The government argues it must be protected from fierce global competitors by high tariffs until it matures and achieves economies of scale. This protectionist logic is the:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Infant industry argument
Explanation
The infant industry argument asserts that new, emerging domestic industries need temporary trade protection to survive initial foreign competition until they become efficient enough to compete.
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