Question

Which of the following arguments for trade protection contends that new domestic industries need support to establish themselves and survive? Multiple Choice a) the cheap foreign labor argument b) the increased domestic employment argument c) the infant industry argument d) the diversification-for-stability argument.

Answer 1

Answer:

Option C is correct.

Explanation:

The infant industry argument is an economic rationale, first described by Alexander Hamilton in 1790. It was later continued by Friedrich List in his book The National System of Political Economy in 1841.

It states that recent industries don't have the same economies of scale as their competitors, and therefore, they need to be protected as they grow.