1. The principal benefit of tariff protection goes to:
A) Domestic consumers of the good produced
B) Domestic producers of the good produced
C) Foreign producers of the good produced
D) Foreign consumers of the good produced
2. If we consider the interests of both consumers and producers, then a policy of tariff reduction in the U.S. auto industry is:
A) Not in the interest of the United States as a whole, nor in the interest of auto-producing states
B) In the interest of the United States as a whole, and in the interest of auto-producing states
C) In the interest of the United States as a whole, but not in the interest of auto-producing states
D) Not in the interest of the United States as a whole, but is in the interest of auto-producing states
3. A ad valorem tariff provides domestic producers a declining degree of protection against import-competing goods during periods of changing prices.
A) True
B) False
4. When the production of a commodity does not utilize imported inputs, the effective tariff rate on the commodity:
A) Exceeds the nominal tariff rate on the commodity
B) Equals the nominal tariff rate on the commodity
C) Is less than the nominal tariff rate on the commodity
D) None of the above
5. A beggar-thy-neighbour policy is the imposition of:
A) Free trade to increase domestic productivity
B) Trade barriers to increase domestic demand and employment
C) Import tariffs to curb domestic inflation
D) Revenue tariffs to make products cheaper for domestic consumers