Other Things Equal, Which One of the Following Will Cause

question 1

Multiple Choice

Other things equal, which one of the following will cause an increase in the effective rate of protection (ERP) in the automobile industry?

• A) a decrease in the nominal tariff rate on automobiles
• B) an increase in the nominal tariff rates on imported inputs used in making automobiles
• C) an increase in the world price of imported inputs used in making automobiles
• D) a decrease in the nominal tariff rates on imported inputs used in making automobiles

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Definitions:

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Broadest Information Set

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