When the production of a commodity does not utilize imported inputs, the effective tariff rate on the commodity:
A. Exceeds the nominal tariff rate on the commodity
B. Equals the nominal tariff rate on the commodity
C. Is less than the nominal tariff rate on the commodity
D. None of the above
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Developing nations often maintain that industrial countries permit raw materials to be imported at very low tariff rates while maintaining high tariff rates on manufactured imports. Which of the following refers to the above statement?
A. Tariff-quota effect
B. Nominal tariff effect
C. Tariff escalation effect
D. Protective tariff effect
Should the home country be "large" relative to the world, its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms-of-trade effect exceeds the sum of the:
A. Revenue effect plus redistribution effect
B. Protective effect plus revenue effect
Consumption effect plus redistribution effect
D. Protective effect plus consumption effect
Should Canada impose a tariff on imports, one would expect Canada's:
A. Terms of trade to improve and volume of trade to decrease
B. Terms of trade to worsen and volume of trade to decrease
C. Terms of trade to improve and volume of trade to increase
D. Terms of trade to worsen and volume of trade to increase
A baggar-thy-neighbor policy is the imposition of:
A. Free trade to increase domestic productivity
B. Trade barriers to increase domestic demand and employment
C. Import tariffs to curb domestic inflation
D. Revenue tariffs to make products cheaper for domestic consumers
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