For the given in Problem 4: (a) Recalculate g if ti = 20 percent and ai =
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(a) Recalculate g if ti = 20 percent and ai = 0 6.
(b) What general conclusion can you reach about the relationship between g and t from your answer to Problem 4 in Chapter 3 and Problem 6(a) above?
In Problem 4
Calculate the rate of effective protection when t (the nominal tariff on the final commodity) is 40 percent, ai (the ratio of the cost of the imported input to the price of the final commodity in the absence of tariffs) is 0.5, and ti (the nominal tariff on the imported input) is 40 percent.
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