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6. Protectionism for infant industries always imposes costs on domestic users of the product and typically has provided little benefit in the form of stronger, competitive industries. True or False.

a. False

b. True

 

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Discusssing the Arguments in Support of Restricting Imports
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Raushan Raj
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3 Nov 2020

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Related questions

5. The infant industry argument for protectionism is to block imports for a limited time, to give the infant industry time to mature, before it starts competing on equal terms in the global economy. True or False.

a. False

b. True

7. The infant industry policy of protectionism and other subsidies seemed to have worked fairly well in East Asia? A study by the World Bank in the early 1990s offered three guidelines to countries thinking about infant industry protection. They are:

a. Not to hand out protectionism and other subsidies to all industries, but focus on a few industries where your country has a realistic chance to be a world-class producer.

b. To be hesitant about using protectionism in areas like computers, where many other industries rely on having the best products available.

c. To have clear guidelines relating to the period of protection available to infant industries. 

d. All of these

Answer the following questions

A. Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign producers of imported sugar.

B. Explain how trade barriers save jobs in protected industries, but only by costing jobs in other industries.

C. Who does protectionism protect? What does it protect them from?

D. Name and define three policy tools for enacting protectionism.

E. How does protectionism affect the price of the protected good in the domestic market?

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