. . . SO H Exercise 1. Consider the Chinese-U.S. real exchange rate, defined as, e = %rw., where S is the nominal exchange rate (defined as dollars per yuan), and PYS and P are the price indices in the U.S. and China. Suppose, further, that China produces and exports manufacturing goods, and the U.S. produces and exports information-technology services. Both countries consume both type of goods and services in equal proportions. Thus, their price indices P = (P{,,;)\"\"r}(PcP.w)\"'s._ where P, ; is the price of information-technology services in country , and P, j; is the price of manufacturing goods in country c. Suppose that in the last year the variation in the real exchange rate e was 5% and that all this variation was due to the imposition of a tarift by the U.S. to the imports of Chinese manufacturing goods. Assume that, absent the tariff, the law of one price held for both goods. Compute the value of the tariff imposed by the U.S. Show your work