The long-run social benefits of infant industry protection are more likely to be realized if
(a) investors believe that tariff barriers are permanent.
(b) investors believe that tariff barriers are transitory.
(c) tariff barriers increase over time.
(d) tariff barriers are replaced with quotas over time.
Question 2
Which of the following is a criticism of the neoclassical counter-revolution school's approach?
a. markets are not competitive in developing countries.
b. externalities are common in developing countries.
c. inequality may worsen when interventions are removed in developing countries.
d. all of the above.
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