1. Calculate the change in the real exchange for country A when the official exchange rate (given in domestic currency units per USD) rises by 15%, the domestic price for non-tradables rises by 35% and the world price of tradables increases 7%.

Is this a real appreciation or depreciation? What are the implications for trade and growth in country A?

2. Calculate the change in net barter terms of trade for country B given that the price of exports has increased 18 percent, export volume grew 12% and the price of imports increased 25%. Is country B better or worse off?

3. Country X faces world prices for refrigerators and refrigerator components, which are 800 shillings and 650 shillings respectively. There is a 35% tariff on imported refrigerators and 5% tariff on imported refrigerator components. What is the effective rate of protection (in percentage terms) for the refrigerator assembly industry in country X? What is the nominal rate of protection in the refrigerator assembly industry?