A. 5 percent

B. 10 percent

C. 15 percent

**D. 20 percent**

### Related Mcqs:

- 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 ?
**A. be less than 12 percent and can be negative**

B. be less than 12 percent but must be greater than zero

C. equal 6 percent

D. exceed 30 percent - For the United States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent For Japan the annual interest rate on government securities equals 10 percent while the annual inflation rate equals 5 percent the above variables would cause investment funds to flow from ?
**A. The United States to Japan causing the dollar to depreciate**

B. The United States to Japan causing the dollar to appreciate

C. The Japan to United States, causing the dollar to depreciate

D. The Japan to United States, causing the dollar to appreciate - For the United States suppose the annual interest rate on government securities equals 8 percent while the annual inflation rate equals 4 percent, For Switzerland the annual interest rate on government securities equal 10 percent while the annual inflation rate equals 7 percent the above variables would cause investment funds to flow from ?
A. the United States to Switzerland causing the dollar to depreciate

B. the United States to Switzerland causing the dollar to appreciate

**C. Switzerland to the United States causing the franc to depreciate**

D. Switzerland to the United States causing the franc to appreciate - Suppose that tomatoes from Mexico face a 20 percent tariff in the United States and a 25 percent tariff in Canada. If the United States and Canada maintain free trade between each other, the these two countries belong to a ?
**A. free-trade area**

B. customs union

C. common market

D. monetary union - If no imported inputs (hard-disk drive) go into the domestic production of a final product (desktop computer) then the ?
**A. nominal tariff rate on the final product equals the effective tariff rate on the product**

B. nominal tariff rate on the final product is greater than the effective rate on the product

C. nominal tariff rate on the final product is less than the effective tariff rate on the final product

D. None of the above - If the nominal interest rate is 7 percent and the inflation rate is 3 percent, then the real interest rate is ?
**A. 4 percent**

B. 10 percent

C. -4 percent

D. 3 percent

E. 21 percent - 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) ?
A. specific tariff

B. ad valorem tariff

**C. compound tariff**

D. effective tariff - If inflation is 8 percent and the real interest rate is 3 percent, then the nominal interest rate must be ?
A. 3/8 percent

B. 5 percent

**C. 11 percent**

D. 24 percent - To aid its calculator producers, suppose that the government provides them a subsidy of $10 for each calculator produced The amount of imports now equals _____ and the deadweight loss of the subsidy to the Canadian economy equals _________?
**A. 20 calculator, $50**

B. 20 calculator, $100

C. 25 calculator, $50

D. 25 calculator, $100 - Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The substitution effect is represented by the movement from point ?
**A. Z to point X**

B. X to point X

C. X to point Z

D. Y to point X