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Assume the free trade market price of a car is $10,000. It contains $5000 worth of steel. The importing country imposes 25 percent tariff on car imports.
a.) Calculate the effective rate of protection if there is no duty on steel imports.
b.) Calculate the effective rate of protection if the importing country imposes a 20% tariff on steel imports.
c.) Suppose it also takes $2000 worth of copper (besides $5000 worth of steel) to produce a car. Calculate the effective rate of protection if there is no import tariff on the imports of either steel or copper.
d.) Suppose there is import duty of 20% and 15% on imports of steel and copper, respectively. Calculate the effective tariff rate.
The consumption function is given by C = 200 + 0.75(Y - T ). The investment function is I = 200 - 25r, r is the real interest rate. Government buy and taxes are both 100.
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As a seller of data to customers in Brazil, suppose you are an exporter and you periodically buy advertising space on Brazilian Web sites to advertise your service;
Would the interest parity condition change if all foreign exchange transactions were subject to a one percent transaction fees? If not, explain your reasoning.
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In 1981, the United State negotiated a contract with the Japanese. The contract called for Japanese auto firms to limit exports to the United State.
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The United State imports Japanese cars with a domestic price of 5,000,000 yen and the yen or dollar exchange rate is 120 on January 1, 2003.
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