When no imported inputs are used in the production of computers,the effective tariff rate on computers
A) exceeds the nominal tariff rate on computers
B) is less than the nominal tariff rate on computers
C) equals the nominal tariff rate on computers

Question

Quizplus · Accepted Answer

The effective tariff rate on a product is the percentage of the product price that is paid as tariff, which takes into account the share of inputs in the production process that are subjected to tariffs. When no imported inputs are used in the production of computers, the effective tariff rate would be the same as the nominal tariff rate imposed on computers. This is because there are no imported inputs to be included in the computation of the effective tariff rate. Therefore, choice C is the best answer.

When No Imported Inputs Are Used in the Production of Computers,the