Consider an open economy for Openland described by the following equations (all figures in millions of dollars):

Y = C + I + G + NX

Y = 8,000 (current value of output)

G = 2,000

T = 1,000 + .1(Y)

C = 450 + 0.75 (Y - T)

I = 2,000 - 40 r

NX = 700- 600 ( is the exchange rate)

r = r* = 5 (real rate of interest)

1. What is the current state of this economy in term of national saving, investment, the trade balance and the equilibrium exchange rate?
2. Suppose government approve an infra structure investment which raises G to 2,250. How would this increase impact what you have calculated in (a) above?