Under which of the following situations will the infant industry argument for protection be valid?
A. Benefits from early business investments accrue to the firms making these early investments.
B. Firms that produce important military hardware have substantial political support.
C. The more a country exports, the more the price of its exports falls relative to its imports.
D. New firms are unable to obtain funds from the financial market owing to inherent imperfections in the banking system.
Answer: D
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The United States is an example of
A) a customs union. B) a free trade area. C) an economic union. D) a common market.
Which of the following was a lesson from the 2007-2009 financial crisis?
a. The financial system needed more leverage in order to operate. b. The job of stabilizing the economy should be assigned exclusively to monetary policy. c. Monetary policy is finished once the Fed reduces the federal funds rate to zero. d. The business cycle still exists.