The effective rate of protection measures
A) the "true" ad valorem value of a tariff.
B) the quota equivalent value of a tariff.
C) the efficiency with which the tariff is collected at the customhouse.
D) the protection given by the tariff to domestic value added.
E) the difference between domestic and foreign prices of the import.

Question

Quizplus · Accepted Answer

The effective rate of protection measures the protection given by the tariff to domestic value added. It takes into account not only the direct impact of the tariff on the imported good but also the indirect impact on the domestic production of inputs used to produce the imported good.

The Effective Rate of Protection Measures