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Can anyone help me with Macroeconomics questions??

3. Assume the United States has a trade surplus with Brazil and imposes new tariffs on Brazilian coffee, a major export to the United States.
(a) Describe the effect of the tariff on the equilibrium price and quantity of coffee in the United States.
(b) What affect will the tariff have on the current account balance in the United States? Explain.
(c) Brazil responds by imposing their own tariff on U.S.-made agricultural machinery.
a. The Brazilian purchase of U.S. agricultural machinery is a debit to which subaccount of the Brazilian balance of payments?
b. What will happen to the quantity of agricultural machinery produced by Brazilian manufacturers?

Respuesta :

It should be noted that there'll be an increase in the price of Brazilian coffee and therefore, the US will demand their domestic coffee.

Effect of tariffs.

Since the United States demand more of their coffee, the demand will shift to the right. Also, the equilibrium price and quantity will increase.

The current account trade balance in the United States will increase as imports will reduce.

Also, when Brazil responds by imposing its own tariff on U.S.-made agricultural machinery, it's a debit to the capital account of the Brazilian balance of payment.

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