The country of Theta restricts the activities of foreign insurance companies in order to give Theta's insurance industry a chance to grow and develop. Theta's actions are an example of the ________ argument in favor of protectionism
A) cheap foreign labor
B) national security
C) threat of retaliation
D) infant-industry
E) dumping
D
Explanation: D) The infant-industry argument states that an undeveloped domestic industry needs time to grow and develop in order to acquire a comparative advantage in the global economy. The protected time to grow will allow plenty of opportunities for the industry to make the investments needed to become innovative.
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According to David Whitwam, former CEO of Whirlpool, one must create an organization whose people are:
A) adept at exchanging ideas, processes, and symptoms. B) absolutely free of the "not-invented here" syndrome. C) constantly working together to identify best global opportunities. D) working together to solve the biggest global problems. E) able to adapt to systems across borders.
Debt financing can add value to a firm because ________
A) it enables investors and firms to develop long term relationships through a joint business endeavor B) some governments allow firms to deduct interest payments from their taxes C) it limits the risk of bankruptcy D) it increases the cash flow toward the company compared to equity financing