One of the main reasons why many economists remain critical of the inf

QUESTION

One of the main reasons why many economists remain critical of the infant industry argument is its reliance on the assumption that:

A. protection of manufacturing from foreign competition is harmful.

B. absolute advantage cannot sustain productivity of an industry.

C. foreign firms too come under the definition of infant industry when they newly enter a foreign market.

D. firms are unable to make efficient long-term investments by borrowing money from the domestic or international capital markets.

E. foreign competition will eventually cause domestic firms to improve the quality of their products.

ANSWER

D