When a manufacturing firm uses some imported inputs in the production process, the appropriate measure of protection is the nominal tariff.

Name: When a manufacturing firm uses some imported inputs in the production process, the appropriate measure of protection is the nominal tariff.
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Question

Quizplus · Accepted Answer

The appropriate measure of protection in this case is the effective rate of protection, which takes into account not only the tariffs on the final goods but also on the imported inputs.

When a Manufacturing Firm Uses Some Imported Inputs in the Production