The import tariff rates are typically higher on final consumption goods than on intermediate goods and raw materials sold to manufacturing firms. This tendency is known as:
A)the tariff escalation pattern.
B)the terms of trade effect.
C)the spillover effect.
D)the sudden-damage effect.

Question

Quizplus · Accepted Answer

Tariff escalation pattern refers to the tendency of higher import tariffs on finished products compared to the raw materials and intermediate goods involved in their production. This is done to protect domestic industries and encourage local value addition.

The Import Tariff Rates Are Typically Higher on Final Consumption