Question

nominal rates of protection group of answer choices are always smaller than effective rates of protection. cannot be negative. are always greater than effective rates of protection. refer to the tariffs placed on intermediate goods used to make the final good or service.

Answer 1

Nominal rates of protection are the tariffs applied to the intermediate items that are used to produce the finished good or service.

Why is it so typical to have low effective protection rates?

• Inconsistent and contradictory tariffs are the product of the poorly thought out and implemented tariff policy.
• Due of their role in determining policy and obtaining funding, importing nations are primarily benefited by tariffs. Tariffs on imported products and services generate income, which is their main advantage. Tariffs can also be used as the starting point for talks between two nations.
• The cost of imported items is raised by tariffs. Domestic consumers end up paying higher prices as a result of the fact that domestic firms are not compelled to lower their prices in response to increasing competition.        

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