An assumption behind the infant-industry argument for tariff protection is that
A) foreign competitors are selling output below average cost.
B) the domestic industry will be facing an upward adjustment in its average cost.
C) the domestic industry will eventually gain a comparative advantage in producing the good.
D) the market needs additional competition to satisfy consumer demand.
Question 2
A negative balance in the capital and financial account means the economy is
A) lending to the rest of the world.
B) running a capital account surplus.
C) borrowing from the rest of the world.
D) importing more than it is exporting.
