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Arguments between the president of the us and china

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Reference no: EM132408679

Because of international arguments between the President of the US and China (don't worry, it would never happen), China decides to increase the tariffs on imported items from the US into China, answer the following questions.

a. Will each of the following groups benefit from the increase in tariff rate?

i. Chinese consumers

ii. US manufacturers. Explain

b. How would the increase in the tariff rates affect each of the following in the US?

i. Current account balance. Explain

ii. Capital account balance.

c. Given the change in US's current account in part (b)(i), what will happen to the aggregate demand in the US?

Reference no: EM132408679

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