Draw and Label the FX Market diagram (STATING THE NOMINAL INTEREST RATE AS X-AXIS AND TODAY'S CURRENT EXHANGE RATE IN THE Y-AXIS WITH DOMESTIC AND FOREIGN RETURN CURVES INTERSECTION AND CHANGES).Make the Dollar the domestic currency and the Pound the foreign currency. Then show how the equilibrium exchange rate changes when:

1. The Bank of England raises short-term interest rates in the UK.
2. The British people vote to leave the EU (Brexit). (Pretend it has not happened yet)
3. The US expected inflation rate rises.