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15. If a Canadian manufacturing firm uses some imported inputs in the production process, the most accurate measure of the rate of protection is the
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16. Assume that Mexico is a small country and it imposes a tariff on imported automobiles. As a result of the tariff
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1) Solution: nominal tariff
Explanation: As lower tariffs will be applied on imported inputs compared to the final imported product, thus the effective rate of production will be applied
2) Solution: the world price of autos remains constant
Explanation: As Mexico is a small country and imposes a tariff, the world export prices pf autos remains unaffected ut the domestic price at Mexico increases by the full amount of the tariff.
15. If a Canadian manufacturing firm uses some imported inputs in the production process, the most accurate measure of the rate of protection is the a. specific tariff b. ad valor...
1) Specific tariffs are a) import taxes stated in specific legal statutes b) import taxes calculated as a fixed charge for each unit of imported goods c) import taxes calculated as a fraction of the value of the imported goods d) import taxes calculated based on the origin country 2) Ad valorem tariffs are a) import taxes stated in advertisements in industry publications b) import taxes calculated as a fixed charge for each unit of imported goods c) import taxes...
Chapter overview 1. Reasons for international trade Resources reasons Economic reasons Other reasons 2. Difference between international trade and domestic trade More complex context More difficult and risky Higher management skills required 3. Basic concept s relating to international trade Visible trade & invisible trade Favorable trade & unfavorable trade General trade system & special trade system Volume of international trade & quantum of international trade Commodity composition of international trade Geographical composition of international trade Degree / ratio of...