Protecting new domestic industries is known as

a.the infant-industry argument.

b.the national security argument

c.the anti-dumping argument.

d.None of the above are correct.

Solutions

Expert Solution

The answer to the given question is,

Option (a) The Infant Industry Argument

The infant industry theory notes that new industries in developing countries need support from external pressures before they evolve and develop economies of scale that can compete with their competitors.

The infant-industry theory assumes that emerging domestic industries would require protection from foreign competition before they become mature and stable.

Economic markets are fundamentally competitive and newer economies are, for a number of reasons, highly vulnerable to their more developed counterparts in other countries. The infant industry 's point is that new industries require protection before they have become sufficiently competitive to compete on the world market.

Rahul Sunny answered 2 years ago

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