Economists believe the most persuasive argument for protectionism is to protect infant industries. But the argument has a drawback. What is this drawback?
A) Governments are usually too impatient and do not allow protection to remain in place long enough to allow industries to be competitive in international markets.
B) Protection lessens the need for firms to become productive enough to compete with foreign firms; this often results in infant industries never "growing up."
C) Governments usually use tariffs, rather than quotas, to protect infant industries in order to collect tariff revenue. (Quotas do not result in government revenue).
D) Governments always make the level of protection for infant industries too high.

Question

Quizplus · Accepted Answer

The primary drawback of protecting infant industries is that it can reduce the incentive for these industries to become efficient and competitive on their own. When industries are shielded from international competition through protectionist measures, they may lack the necessary pressure to innovate and cut costs, which can lead to a situation where they remain dependent on government support and never become truly competitive in the global market.

Economists Believe the Most Persuasive Argument for Protectionism Is to Protect