1. Explain how an overvaluation affects the equilibrium of the balance of trade. consider the argument of the marshall-lerner condition and the J-curve in its answer.

2. Explain the effects of a change in the nominal exchange rate on aggregate demand, use the IS curve in your argument

3. What are the effects of currency purchases by the central bank on the money market? use the LM curve in your argument

4. Explain the effects of an increase in the interest rate of the rest of the world (i*) on the balance of payments. use the BP curve in your description.