Question

Maroij, a developing country, has a potential comparative advantage in manufacturing electronic goods but is unable to compete with China, at least for the near future Maroii's predicament is best explained by the:_____. a. Infant industry argument. b. Economic development argument. c. Comparative advantage theory d. Mixed economy theory e. National security argument. f. International business

Answer 1

Answer:

A. Infant industry argument.

Explanation:

The infant industry argument is an economic foundation for protection of trade. The main premise of the argument is that small industries most times lack the economic strength that older and stronger competitors from other countries may have, and as such need protection until they grow to a level of relative stability.

Alexander Hamilton first brought up the argument in his 1790 Report on Manufacturers, afterwards it was systematically developed by Daniel Raymond and was modified by Friedrich List in his 1841 work, The National System of Political Economy.

Therefore, Maroij's predicament is best suited to this school of thought.