Let's say that you are the economic leader of your country and that your country is just beginning to set up its own automobile industry. In order to better compete with foreign countries that have more experienced and lower cost automobile production capabilities, you feel that it is necessary to impose tariffs and quotas on foreign imported cars. According to our text, this argument is called _______________ and this argument is _________________________.
A. the improving the trade deficit argument; valid and strong, because beginning industries need help and protection getting off the ground.
B. the improving the trade deficit argument; valid and strong, because countries who use this argument need protection for at least several decades from stronger nations who have well-developed industries.
C. the infant industry argument; a good argument for less-developed countries in the short and long run because most of the less-developed countries are poor and their governments are corrupt. Consequently, businesses in these countries need economic help.
D. the infant industry argument; not a good idea, because restricting foreign trade discourages efficiency within the industry and after several years of tariffs and quotas it becomes difficult to eliminate the tariffs. An industry that is not required to fully compete with foreign countries will most likely not become very competitive.
Let's say that you are the economic leader of your country and that your country is just beginning to set up its own automobile industry. In order to better compete with foreign countries that have more experienced and lower cost automobile production capabilities, you feel that it is necessary to impose tariffs and quotas on foreign imported cars. According to our text, this argument is called _______________ and this argument is _________________________.
A. the improving the trade deficit argument; valid and strong, because beginning industries need help and protection getting off the ground.
B. the improving the trade deficit argument; valid and strong, because countries who use this argument need protection for at least several decades from stronger nations who have well-developed industries.
C. the infant industry argument; a good argument for less-developed countries in the short and long run because most of the less-developed countries are poor and their governments are corrupt. Consequently, businesses in these countries need economic help.
D. the infant industry argument; not a good idea, because restricting foreign trade discourages efficiency within the industry and after several years of tariffs and quotas it becomes difficult to eliminate the tariffs. An industry that is not required to fully compete with foreign countries will most likely not become very competitive.