Suppose That the Nominal Tariff Rate on Final Good X

question 25

Multiple Choice

Suppose that the nominal tariff rate on final good X is 8 percent and that the weighted average of the nominal tariff rates on the inputs used in producing good X is 12 percent. In this situation, the effective rate of protection (ERP) for final good industry X

• A) must be greater than 12 percent.
• B) must be between 8 percent and 12 percent.
• C) must be less than 8 percent and greater than zero percent.
• D) must be less than 8 percent and can be negative.

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Definitions:

State Societies

Societies characterized by the presence of a formal governmental organization, laws, and social stratification.

Justice

A concept of moral rightness based on ethics, rationality, law, natural law, religion, equity, and fairness.

Kin-Ordered

A social organization system where relationships based on kinship play a central role in the structuring of society.

Unifying Factor

An element or characteristic that brings individuals or groups together, fostering cohesion or unity among them.