What are the four major defensive motives for government intervention? In a short essay, provide a brief explanation of each motive
What will be an ideal response?
a. Protecting the National Economy–Proponents argue that firms in advanced economies cannot compete with those in developing countries that employ low-cost labor. Activists also call for trade barriers to curtail imports of cheap products, fearing that advanced economy manufacturers will be undersold, wages will fall, and home-country jobs will be lost. Therefore, the argument goes, governments should impose trade barriers to block imports.
b. Protecting Infant Industries–In an emerging industry, companies are often inexperienced and lack knowledge of the latest technologies. They may also lack the scale typical of larger competitors in established industries abroad. Therefore, an infant industry may need temporary protection from foreign competitors. Accordingly, governments can impose trade barriers on foreign imports, ensuring young firms a large share of the domestic market until they are strong enough to compete on their own. Protecting infant industries has allowed some countries to develop a modern industrial sector.
c. Protecting National Security–Countries impose trade restrictions on products viewed as critical to national defense and security, such as military technology and computers. Trade barriers can help maintain domestic productive capacity in security-related products, such as computers, weaponry, and certain transportation equipment.
d. Protecting National Culture and Identity–In most countries, certain occupations, industries, and public assets are seen as central to national culture and identity. Governments may impose trade barriers to restrict imports of products or services seen to threaten such national assets. Switzerland has imposed trade barriers to preserve its long-established tradition in watchmaking. In the United States, authorities opposed Japanese investors' purchase of Pebble Beach golf course in California and the Seattle Mariners baseball team because these assets are viewed as part of the national heritage.
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The risk that a debt security's price will fall, subjecting the investor to a potential capital loss is
A. credit risk. B. market risk. C. currency risk. D. liquidity risk. E. political risk.
Justin conducts a survey on behalf of his firm, Komatsu. In the survey, he asks prospects to rate Caterpillar and Komatsu branded tractors on their performance on attributes that are important to the customer
In which step in the customer value analysis is Justin engaged? A) Examine how customers in a specific segment rate the company's performance against a specific major competitor on an individual attribute or benefit basis. B) Assess the quantitative importance of the different attributes and benefits. C) Identify the major attributes and benefits customers value. D) Monitor customer values over time. E) Assess the company's and competitors' performances on the different customer values against their rated importance.