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2. BalassaSamuelsson with tariffs (35 points) Consider an economy with two countries, China and the United States. China produces nontraded goods and shoes. The United

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2. BalassaSamuelsson with tariffs (35 points) Consider an economy with two countries, China and the United States. China produces nontraded goods and shoes. The United States produces nontraded goods and cars. Both shoes and cars can be traded. All types of goods are produced by perfectly competitive rms using labor according to production functions of the form Q; = Aier? where Air\

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