The International Comparison Program (ICP) reported a price level index (PLI) for China of 42 in 2005 and 54 in 2011. Recall that, by construction, the PLI for the U.S. is always 100. 1. Find the percent change in the Yuan-Dollar real exchange rate between 2005 and 2011. 2. In 2005 the size of the Chinese economy, at PPP exchange rates, was 43 percent that of the U.S. economy. Ignoring growth in physical output, find the size of the Chinese economy, at 2011 PPP exchange rates, relative to that of the U.S. economy. 3. Suppose instead that all of the observed real appreciation of the Yuan was due to the imposition of import tariffs by China. Assume that in the U.S. and China the price level is given by P = P XP 1 M , where = 0.5, PX and PM denote export and import prices, respectively, and that absent tariffs the law of one price holds. Find the size of the import tariff.