If the Domestic Value Added Before an Import Tariff for a Product

question 43

Multiple Choice

If the domestic value added before an import tariff for a product is $500 and the domestic value added after the tariff is $550, the effective rate of protection is

• A) 5 percent.
• B) 8 percent.
• C) 10 percent.
• D) 15 percent.

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Definitions:

Eurocurrency

Currency deposited by national governments or corporations in banks outside their home market, typically in a currency not native to the deposit location.

Financial Centre

A global city known for hosting a cluster of national or international financial institutions, markets, and service providers.

Money

A medium of exchange that enables the transfer of goods and services among parties.

Forward Rate

The interest rate agreed today for a loan to be made in the future.