Question content area

Part $1$

Private saving can be given by the following$$ equation:

Upper S Superscript p Baseline equals Upper I plus CA plus left parenthesis Upper G minus Upper T right parenthesisSp$=$I$+$CA$+($G$$T$).$

This equation can be rewritten$$ as:

CA equals left parenthesis Upper S Superscript p Baseline minus Upper I right parenthesis plus left parenthesis Upper T minus Upper G right parenthesisCA$=$Sp$$I$+($T$$G$).$

$$Nowadays$,$ some people recommend restrictions on imports from China$($and other$$ countries$)$ to reduce the American current account deficit. How would higher U$.$S$.$ barriers to imports affect private$$ saving, domestic$$ investment, and government$$ deficit?