6. International Trade and Capital Flows (20 points). Consider an open economy in a small country with perfect capital mobility. The country's investment depends on the real interest rate such that I = I(r). The country has fixed saving. a.) Plot the country's investment and savings curves on a graph. Label the x- and yaxes with the appropriate variables. b. On your graph in part a.), show an example of the world interest rate where: 1. Net exports are positive (trade surplus) 2. Net exports equal zero (balanced trade) 3. Net exports are negative (trade deficit) c.) Suppose the country raises government spending. On a new graph below, show the effects on the model. d.) What happens to net exports as a result of the change in fiscal policy? Explain why this change takes place