When a Nation Imports Materials and Other Inputs for Production

question 51

Multiple Choice

When a nation imports materials and other inputs for production duty free, its tariff policy generally results in

• A) an effective tariff rate less than the nominal tariff rate.
• B) a nominal tariff rate less than the effective tariff rate.
• C) a rise in both nominal and effective tariff rates.
• D) a fall in both nominal and effective tariff rates.

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Definitions:

Financial Statements

Structured reports that convey the financial activities and condition of a business or individual, including balance sheets, income statements, and statements of cash flows.

Warranty Liability

An obligation companies assume when they provide a promise to repair, replace, or refund products that fail to perform as expected.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate period.

Warranty Contract

An agreement where a seller promises to repair or replace a product if it breaks or malfunctions within a certain period of time.