Suppose that th e nominal tariff rate on an imported final product is 015, while the ratio of the value of imported input to the value of the finished product is 065, and the nominal tariff rate on...

Suppose that thenominal tariff rate on an imported final product is 015, while the ratio of the value of imported input to the value of the finished product is 065, and the nominal tariff rate on the imported input is 0025

1. calculate the effective rate of protection


2. now assuming government increases the nominal tariff rate on the imported input to 01, calculate the new effective rate of protection


3. assuming you are a member of a trade policy based that seeks to bolster domestic production, based on your answers in (i) and (ii), which nominal tariff rate on the imported input will you suggest to your boss


4. Briefly explain your answer