A. I hope you don't have any money riding on this question--your sister wins.
Neonatal acne, or acne in newborn babies is in fact quite COMMON, and is often in full bloom just when friends and family are demanding baby pictures! It really is related to maternal hormones, which can also cause a small amount of blood-tinged vaginal secretions in newborn baby girls as well as temporary breast enlargement in both baby girls and boys.
Neonatal acne sometimes lasts for several months, but is best left alone--it will go away on its own. And no, it is not related to bacterial infection (neither is all adult acne).
A final point--your suggestion that a poor immune system might be related to antibiotic use is a very common misunderstanding. Many people fear that antibiotic use will somehow alter their bodies' natural ability to fight disease. This is not true. However, excessive and inappropriate use of antibiotics (including not taking the full amount prescribed) can encourage the development of strains of bacteria resistant to antibiotics.
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