The effects of a tariff system on an industry's value added, taking account of tariffs on imported inputs as well as on output. Defining units of output and imported inputs so that their prices would be 1 under free trade, if the tariff on output is 100t per cent and the tariffs on imported inputs are 100s per cent, and a units of imported inputs are used per unit of output, with zero tariffs value added per unit of output is (1 - a). With tariffs value added per unit is [(1 + t) - a(1 + s)]. The rate of effective protection e is then defined by (1 + e) = [(1 + t) - a(1 + s)]/(1 - a), so that e = (t - as)/(1 - a). Effective protection is increased by higher tariffs on output, and decreased by higher tariffs on imported inputs.

• rational number
• rationing
• Rawlsian social welfare function
• raw materials
• R&D
• reaction curve
• Reaganomics
• real balance effect
• real balances
• real business cycle
• real costs
• real exchange rate
• real GDP
• real GNP
• realignment of exchange rates
• real income
• real interest rate
• real money supply
• real national income
• real number
• real terms
• real variable
• real wage resistance
• real wages
• receivership