Question

Ad valorem tariffs are a. the same as import quotas. b. import taxes calculated as a fixed charge for each unit of imported goods. c. import taxes calculated as a fraction of the value of the imported goods. d. import taxes stated in ads in industry publications.

Answer 1

Option (c) is correct.

Step-by-step explanation:

Ad valorem tariffs refers to the tariff which are used to restrict the imports from the other country and protect the domestic producers. It is calculated as a fraction of the total value of the goods imported.

For example: Thee United States imported some quantity of automobiles from Thailand. Hence, the ad valorem tariff is 3% of the total value of automobiles imported from the Thailand.