Tariffs And Industrial Development(Economics ) Questions and Answers

Question 1. Suppose that the nominal tariff rate on finished computers is 12 percent and that the weighted average of the nominal tariff rates on the inputs used in producing computers is 18 percent. Thus, the effective rate of protection for the computer industry must ?
  1.    be less than 12 percent and can be negative
  2.    be less than 12 percent but must be greater than zero
  3.    equal 6 percent
  4.    exceed 30 percent
Explanation:-
Answer: Option A. -> be less than 12 percent and can be negative
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 2. With free trade the total value of imports would equal ?
  1.    $100,000 units
  2.    $400,000 units
  3.    $600,000 units
  4.    $800,000 units
Explanation:-
Answer: Option B. -> $400,000 units
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 3. Suppose that Pakistan imposes a tariff on ballpoint pens of 25 rupees per pen plus 12 percent of the pen’s value, this is an example of a (an) ?
  1.    specific tariff
  2.    ad valorem tariff
  3.    compound tariff
  4.    effective tariff
Explanation:-
Answer: Option C. -> compound tariff
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 4. Concerning import tariffs of the United States empirical studies tend to conclude that these tariffs are ?
  1.    Progressive and thus bear down on the wealthy
  2.    regressive and thus bear down on the poor
  3.    proportional and thus bear down on all consumers in the same manner
  4.    deflationary and thus result in reductions in the price of imports
Explanation:-
Answer: Option B. -> regressive and thus bear down on the poor
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 5. Concerning a government’s trade policy, all the following generally apply except ?
  1.    economic downturn and recession generally result in greater protectionism
  2.    because domestic consumers outnumber domestic producer’s policy markers usually enact Free-trade policies to satisfy the consumer majority:
  3.    When domestic exporting companies are organized, policy tends to favor freer trade
  4.    Policy tends to favor freer trade in countries whose imports are inputs into critical industries
Explanation:-
Answer: Option B. -> because domestic consumers outnumber domestic producer’s policy markers usually enact Free-trade policies to satisfy the consumer majority:
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 6. If the world price of steel is $500 a ton a specific tariff $50 is equivalent to an ad valorem tariff of______________?
  1.    5 percent
  2.    10 percent
  3.    15 percent
  4.    20 percent
Explanation:-
Answer: Option B. -> 10 percent
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 7. With the tariff the government collects?
  1.    $75,000
  2.    $100,000
  3.    $125,000
  4.    $150,000
Explanation:-
Answer: Option B. -> $100,000
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 8. In today’s world, most countries impose tariffs ?
  1.    only on imports
  2.    only on exports
  3.    on both imports and exports
  4.    on imports exports and nontraded goods
Explanation:-
Answer: Option A. -> only on imports
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 9. Suppose there is no tariff on imported inputs and the ratio of the value of imported inputs the value of the final product is 0.5 If the nominal tariff rate on the final product is 10 percent, the effective tariff rate equals ?
  1.    5 percent
  2.    10 percent
  3.    15 percent
  4.    20 percent
Explanation:-
Answer: Option D. -> 20 percent
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 10. Domestic producers gain ________ because on the tariff?
  1.    $50,000
  2.    $75,000
  3.    $120,000
  4.    $150,000
Explanation:-
Answer: Option B. -> $75,000
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
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