Question 1

The infant industry argument is that

Accepted Answer

A) comparative advantage is irrelevant to economic growth. 
B) developing countries have a comparative advantage in manufacturing. 
C) developing countries have a comparative advantage in agricultural goods. 
D) developing countries have a potential comparative advantage in manufacturing. 
E) developing countries have no chance to compete with industrialized countries.

Question 2

The growth successes of the high performance Asian economies

Accepted Answer

A) enforces United States' hesitation to trade with developing countries. 
B) rejects the belief that economic development requires import substitution policies. 
C) suggests that free trade policies are required for successful economic development. 
D) supports the belief that economic development requires import substitution policies. 
E) rejects the belief that export- oriented industrialization is likely to promote economic development.

Question 3

Historically those few developing countries which have succeeded in significantly raising their per- capita income levels

Accepted Answer

A) tended to provide heavy protection to domestic industrial sectors. 
B) did so to the detriment of their nearest neighbors. 
C) favored industrial to agricultural or service sectors. 
D) did not accomplish this with import- substituting industrialization. 
E) did accomplish this with import- substituting industrialization.

Exam 11: Trade Policy in Developing Countries

The infant industry argument is that

The growth successes of the high performance Asian economies

Historically those few developing countries which have succeeded in significantly raising their per- capita income levels