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A Major Difficulty with the Infant Industry Argument for Protection

Question 36

Multiple Choice

A major difficulty with the infant industry argument for protection is that


A) government revenue will fall with a tariff.
B) it requires the nation to fall into the large country case for tariff protection.
C) effective rates of protection are usually greater than nominal rates.
D) the measurement of production externalities is hard and uncertain.
E) the productivity of infant industries is usually declining.

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