What happens to investment in tanzanyika, Macroeconomics

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What happens to investment in tanzanyika

Problem

Suppose that Tanzanyika is a small open economy. Suppose that a large number of foreign countries begin to raise their government spending, G, but Tanzanyika does not raise their government spending.

1) What happens to the world interest rate?

2) What happens to saving in Tanzanyika?

3) What happens to investment in Tanzanyika?

4) What happens to Tanzanyika's trade balance?

5) What happens to Tanzanyika's real exchange rate?

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