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    Question

    A country Kaishala imposes a 10% tariff on imported

    vehicles but no tariff on imports of machinery or other inputs to the manufacture of vehicles. Suppose that under free trade, the cost of imported material is $8000 for a $10000 vehicle. Calculate the effective rate of protection.
    A 20% Correct Answer Incorrect Answer
    B 25% Correct Answer Incorrect Answer
    C 30% Correct Answer Incorrect Answer
    D 50% Correct Answer Incorrect Answer

    Solution

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