Using the data of Table 8.1, and noting that (I A) 1 = [(I A)

Question:

Using the data of Table 8.1, and noting that

(I − A′)

−1 = [(I − A)

−1

]′, calculate the effect on prices of a 50% increase in the import costs in the agriculture sector, due to the imposition of a tax on fuel imports. Why is your calculation likely to overestimate the effects of this cost increase?

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