International Trade CH 11 You\'ll Remember Quizlet PDF

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12/22/2020

International Trade CH 11 You'll Remember | Quizlet

International Trade CH 11 5.0

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Terms in this set (19) Disagree, there is no

"Japan's experience makes the infant

clear evidence that

industry case for protection better than

infant industry

any theory. In the early 1950s Japan was a

protection was the cause

poor nation that survived by exporting

of economic

textiles and toys. The Japanese

development in Japan.

government protected what at first were

This may simply be a

inefficient, high-cost steel and automobile

case of a "pseudoinfant

industries, and those industries came to

industry."

dominate world markets."

In the case of imperfect

A country currently imports automobiles

capital markets.

at $8,000 each. Its government believes domestic producers could manufacture autos for only $6,000 given time but that there would be an initial shakedown period during which autos would cost $10,000 to produce domestically. Suppose that each firm that tries to produce autos must go through the shakedown period of high costs on its own. Under what circumstances would the existence of the initial high costs justify infant industry protection?

No firm has an incentive

Now suppose, on the contrary, that once

to be the first to enter

one firm has borne the costs of learning

the industry because it

to produce autos at $6,000 each, other

will bear the cost while

firms can imitate it and do the same.

other entrants reap the

Explain how this can prevent development

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example of the

of a domestic industry and how infant

appropriability problem,

industry protection can help.

which can justify infant industry protection as a second-best solution.

It proved effective for

Which of the following statements

most developing

regarding infant industry protection is

countries in the 1970s.

NOT true?

It explains the East-Asian

Which of the following statements

"Miracle."

regarding import-substituting industrialization is NOT true?

India, having just broken

India and Mexico both followed import-

free of British

substitution policies after World War II.

colonialism, sought to

However, India went much further,

distance itself as much

producing almost everything for itself,

as possible from foreign

while Mexico continued to rely on imports

influence.

of capital goods. Which of the following is

Unlike India, the

most likely to have caused this difference

presence in Mexico of a

to emerge?

domestic manufacturing lobby kept the country open to the importation of capital goods necessary in the manufacturing process.

Protectionist policies

What were some of the reasons for the

had a negative effect on

decline in the import-substituting

incentives, which led to

industrialization strategy in favor of a

rent-seeking or

strategy that promotes open trade?

corruption in some https://quizlet.com/176425652/international-trade-ch-11-flash-cards/

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developing countries. High rates of effective protection allowed industries to survive when their cost of production was three to four times higher than the price of the imports they replaced. Countries pursuing import substitution were not catching up with advanced countries. The division of the

What is "economic dualism?"

economy into two sectors that are at different stages of development.

accomplished this with

Those developing countries which have

policies other than

succeeded in significantly raising their

import-substituting

per-capita income levels

industrialization.

Trade liberalization

The experience of Chile's foreign sector in

policies.

the last two decades of the 20th Century supports the proposition that economic growth is supported by

rejected the

The relatively rapid economic growth

conventional Latin

experienced by Chile in the late 1980s

American reliance on import substitution.

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Protectionist policies

Brazil's export record in 1999 illustrated

tend to discourage

the principle that

exports.

Many countries pursuing

The disappointment with import-

this strategy

substitution policies is in part because

experienced stagnation in their growth.

High performance Asian

Which countries appear to have most

countries.

benefited from international trade during the last few decades?

Export-led growth, high

What do these countries seem to have in

savings rates, and rapid

common?

improvements in education.

No, their experience

Does their experience lend support to the

argues against it

infant industry argument or help to argue

because the HPAE

against it?

countries have lower average rates of protection than other developing countries.

At the end of the 1970s.

China began its economic ascent

centrally planned

Among the countries that illustrate the

economy into a market

Asian takeoff, the most spectacular

economy.

change was in China, where Deng Xiaoping converted a

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False. Other factors

True or False. Asia's economic takeoff can

played a crucial role in

be attributed entirely to trade

the Asian miracle.

liberalization.

THI S SET IS OFTE N I N FO LDE RS W ITH ...

ECON Ch 11

Econ Midterm 3

33 terms

35 terms

conniechou

Ben_Wendle

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