Question

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Answer the following about industrial policy, where governments take active steps to encourage innovation and protect certain industries, for 10 points each.
[10h] A major justification for industrial policy is based on the fact that dynamic learning-by-doing and fixed costs mean that industries described by this term of art require short-term government protection to be viable in the long run.
ANSWER: infant industry [accept nascent industry; accept infant industry argument]
[10m] A common industrial policy strategy involves the “substitution” of this type of good as promoted by Raúl Prebisch and Hans Singer. This type of good is subtracted in the “NX” term of the standard expenditure formula for GDP.
ANSWER: imports [accept import substitution or import substitution industrialization]
[10e] Import substitution industrialization is related to this economic theory prevalent in early modern Europe, which claimed that the accumulation of gold and silver should be the goal of trade policy and so attempted to maximize exports and minimize imports.
ANSWER: mercantilism [accept mercantilist]
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Claremont AMichigan State A0101020
Texas AIowa A001010
Rice AIowa B001010
UW ASorbonne0101020
Texas A&M AAppalachian State0101020
UBC ATexas A&M B1001020