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:

Informational Influence

A reason for conformity based on people’s desire to be correct.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms, policies, or societal expectations.

Correct Answer

The accurate response or solution to a question, problem, or challenge, often determined through factual knowledge or logical deduction.

Milgram Shock Experiment

A series of social psychology experiments conducted by Stanley Milgram, demonstrating individuals' willingness to obey authority figures, even when actions cause harm to others.