Question

Many developing countries have a potential comparative advantage in manufacturing, but new manufacturing industries cannot initially compete with well-established industries in developed countries, according to:

A. economic development argument.

B. comparative advantage theory.

C. national security argument.

D. infant industry argument.

E. mixed economy theory.

Answer 1

D is the answer-Great question!

Answer 2

The student's question relates to the infant industry argument, which supports protecting new industries in developing countries to help them grow and compete internationally.

Step-by-step explanation:

The correct answer to the question is: D. infant industry argument.

According to the infant industry argument, new manufacturing industries in developing countries cannot initially compete with established industries in developed countries because they have not yet achieved the efficiency, skills, management, technology, and economies of scale needed. These industries may require temporary protection through trade restrictions to nurture and develop into competitive enterprises. This argument acknowledges that protectionism has a cost to consumers but asserts that these costs can be justified by the long-term benefits of fostering a competitive domestic industry.