When the production of a commodity does NOT utilize imported inputs, the effective tariff rate
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) is a percentage of the nominal tariff rate on the commodity.

Question

Quizplus · Accepted Answer

If the production of a commodity does not utilize imported inputs, then the effective tariff rate would be equal to the nominal tariff rate on the commodity. This is because the nominal tariff rate is the rate applied to the imported inputs used in the production of the commodity. Since no imported inputs are used, the effective tariff rate would be the same as the nominal tariff rate.

When the Production of a Commodity Does NOT Utilize Imported