2.Consider the short-run money market model and the short-run exchange rate model together:

a.Draw the combined models in a single graph, showing the initial domestic interest rate (r1) and the initial exchange rate (e1)

b.Show how the short-run model would change with a decrease in domestic money supply, specifically noting the impact on domestic interest rates, exchange rates, and the price level

c.Following on from part (b), explain why the exchange rate changes

d.In the long-run, what will be the impact on domestic interest rates, exchange rates, and the price level?