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2. (Trade Barriers and the Real Exchange Rate) Suppose in coun- tries A and B households consume only cars and Spaghetti. Suppose that both goods

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2. (Trade Barriers and the Real Exchange Rate) Suppose in coun- tries A and B households consume only cars and Spaghetti. Suppose that both goods are internationally traded. Suppose the price index is of the form P1- : \"Papas, where B, PF, and Pf denote, reSpectively, the consumer price index, the price of cars, and the price of Spaghetti in country 2' = A, B. (a) What is the real exchange rate in the absence of trade barriers? (b) What is the real exchange rate if country A imposes a 10 percent import tariff on cars

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