Author Question: What is a primary disadvantage of industrial policy? What will be an ideal ... (Read 55 times)

HCHenry · **on:** Jul 7, 2018

What is a primary disadvantage of industrial policy?

What will be an ideal response?

Question 2

What is opportunity cost? Why is opportunity cost an important consideration when determining what a country should export and import?

What will be an ideal response?

TheNamesImani · **Reply #1 on:** Jul 7, 2018

Answer to Question 1

Some experts argue that government bureaucrats cannot perfectly identify the right industries to favor under such a policy.

Answer to Question 2

The opportunity cost of a good is the value of what is given up to get the good. Opportunity cost acknowledges that a country should also consider how its efforts are best spent. While a country may be absolutely more productive than another country, it must consider that productivity relative to other things that the country could be producing.