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You are given the following information for the economy of Azerbaijan: the marginal propensity to save (S) is 0.25, and the marginal propensity to import
You are given the following information for the economy of Azerbaijan: the marginal propensity to
save(S) is 0.25, and the marginal propensity to import(M)is 0.15.
Suppose the government of Azerbaijan increased its domestic government spending by 70 million Azerbaijani Manat (AZN) its
national currency.
Assume that Azerbaijan has an exports value of 25 million AZN.
Required:
(i) Determine the effect on GDP, consumption, savings, and import.
(ii) What effect will the increase in exports have on the trade balance?
Please help me to answer
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