Suppose,to Produce $200,000 Worth of Finished Cloth in the US,textile

question 48

Multiple Choice

Suppose,to produce $200,000 worth of finished cloth in the US,textile producers import $150,000 of raw materials.The raw materials are imported duty free.However,the US has imposed a 5% nominal tariff on imports of finished cloth.What is the effective rate of protection enjoyed by the domestic cloth producers in the US?

• A)20%
• B)10%
• C)5%
• D)6%

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Definitions:

Dividends Payable

A liability account listed on a company's balance sheet representing the amount of declared dividends that are owed to shareholders.

Cash Dividend

A payment made by a company out of its profits to its shareholders in the form of cash.

Stock Dividend

A dividend payment made to shareholders in the form of additional shares of stock rather than cash.

Common Stock Dividend Distributable

A liability recorded on a company's balance sheet for dividends declared but not yet paid to shareholders.