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- Subject
- Tariffseconomics-mcqs › tariffs
- Published
- 28 May 2019
- Last updated
- 28 May 2026
When no imported components (such as hard-disk drives) are used in the domestic manufacturing of a final good (like a desktop computer), what is the relationship between the nominal tariff rate and the effective tariff rate on that product?
Multiple choice question for Tariffs. Select an option, then review the explanation below.
Explanation
If a final product is produced domestically without any imported inputs, the nominal tariff rate applied to the product will be identical to the effective tariff rate. This is because the effective tariff rate accounts for tariffs on both the final product and its imported inputs, and with no imported inputs, both rates must be equal.
More Tariffs MCQs
Practice related questions from the same subject.
- 1.Under a free trade system, what is the total worth of imports?
- 2.What do empirical studies generally indicate about the nature of U.S. import tariffs?
- 3.Which of the following statements about government trade policies is NOT typically true?
- 4.If the nominal tariff on finished computers is 12% and the weighted average nominal tariff on the inputs for making computers is 18%, what can be said about the effective rate of protection for the computer sector?
- 5.If Pakistan applies a tariff on ballpoint pens consisting of 25 rupees per pen plus 12% of the pen's price, what type of tariff is this an example of?