Page 526 - 2016 - Vol. 40

positively affected by government expenditure and
exports."

Ram (1986), utilizing A two-sector model, in a
cross-section study of 115 countries and in the two-decade
period from 1960 through 1980, found that growth of
government size has a positive effect on economic growth.

The findings of Mahran (1987) have further warned
that the devaluation would also increase the trade deficit;
however, the current result showed an increasing total
exports and declining total imports. This is particularly
obvious when the exchange rate is simulated to depreciate
by 5%, where the trade deficit as a percentage of the
nominal growth domestic product (GDP) will deviate from
the baseline share by 2% less. Deteriorations in the
consumption expenditure of households and total
absorption are mainly due to the increase in the domestic
price of goods particularly when the exchange rate is
simulated to depreciate by 10% and 15%.

Zaid (1989) examined export promotion as a viable
trade strategy for the acceleration of development and the
improvement of the debt situation over the period (1956-
1980).He tested the possibility of a two-way causation

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