The effective rate of protection is a weighted average of nominal tariffs and tariffs on imported inputs
It has been noted that in most industrialized countries, the nominal tariffs on raw materials or intermediate components or products are lower than on final-stage products meant for final markets. Why would countries design their tariff structures in this manner? Who tends to be helped, and who is harmed by this cascading tariff structure?
The cascading tariff structure is probably the result of systematic lobbying on the part of manufacturing interests and lobbies to lower costs of production (in terms of imported inputs). The end result is in fact to create effective rates of protection for downstream, or final manufacturing processes that are often much higher than nominal tariffs on these products. An important group, which is hurt by this are exporters of raw materials and components in developing countries.
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A bottle of wine manufactured in Paris, France cost 45 euros. What is the dollar value of the wine if the exchange rate is $0.80 per euro?
A) $36.00 B) $56.25 C) $40.00 D) None of these dollar values is correct.
When demand for a product is very inelastic, the burden of a tax falls mainly on
a. producers. b. consumers. c. tax collectors. d. people who drop out of the market.
Which of the following statements about inputs is correct?
a. A forest is an example of a natural resource; it is also an example of a renewable resource. b. There is no distinction between human capital and technological knowledge. c. Human capital is a non-produced factor of production. d. Physical capital is a non-produced factor of production.
The price level is a
a. relative variable. b. dichotomous variable c. real variable. d. nominal variable.