Under which circumstance is the national security justification for trade protection most justified?

Multiple choice question for Tariffs. Select an option, then review the explanation below.

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When the goal is to sustain protection indefinitelyIf the sector experiences increasing returns to scaleDuring times of economic downturnWhen the industry supplies essential products in wartimeIf the market is highly competitive

Explanation

The national security argument for protection holds strongest when the industry in question produces critical goods necessary during wartime, ensuring the nation's defense capabilities are maintained.

Practice related questions from the same subject.

1.Under a free trade system, what is the total worth of imports?
2.What do empirical studies generally indicate about the nature of U.S. import tariffs?
3.Which of the following statements about government trade policies is NOT typically true?
4.If the nominal tariff on finished computers is 12% and the weighted average nominal tariff on the inputs for making computers is 18%, what can be said about the effective rate of protection for the computer sector?
5.If Pakistan applies a tariff on ballpoint pens consisting of 25 rupees per pen plus 12% of the pen's price, what type of tariff is this an example of?

Under which circumstance is the national security justification for trade protection most justified?

Explanation

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