Author Question: The nominal rate of protection shows the extent to which the domestic price of imported goods ... (Read 108 times)

james9437 · **on:** Jun 30, 2018

The nominal rate of protection shows the extent to which the domestic price of imported goods exceeds

(a) what the price would be without tariffs.
(b) the cost of intermediate inputs.
(c) the social opportunity costs of the good.
(d) the no-trade equilibrium price.

Question 2

During the past decade, India has invested about 22 of its GDP while China's investment rate has been double that of India's. India's annual growth rate has been about 6 while that of China has been about 9. What conclusions can you draw?

What will be an ideal response?

Moriaki · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

A

Answer to Question 2

Students are asked to relate investment rates to the rate of economic growth through the Harrod-Domar model. The students should calculate the ICOR for the two countries and note that India's ICOR (about 3.67) is lower than China's (about 5).