If Offshore Assembly Provisions Were Extended to Include More Goods

question 11

Essay

If offshore assembly provisions were extended to include more goods, what would this do to the actual level of protection provided by a country's nominal tariff schedule? Explain. If the extension of the provisions is made to final goods but not to intermediate goods, what would this do to the effective rate of protection (ERP) for the country provided by its tariff schedule? Explain.

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Definitions:

Gain Sharing

A type of incentive plan where savings from increased productivity are shared between employees and the company.

Free-riding Problems

Situations where individuals or entities benefit from resources or services without paying for them, typically leading to underprovision or overuse.

Group Scheme

A structured plan or arrangement often related to insurance or benefits, which is made available to a group of people such as employees or organization members.

Equity

Represents the ownership value in an asset or business, generally calculated as the difference between assets and liabilities.