Here is the question below:

(0) Draw a diagram to depict the supply and demand curve for euro as found above. What is the equilibrium value of the exchange rate? (d) Is this foreign exchange market stable? Why? Does your answer to part (c) have anything to do with the Marshall- Lerner condition? Explain. (e) Would your answer to (d) change if the EU quantity of oil imports (column 3) in the rst table changed to 50, 60 and 70 (instead of 50, 75, 100)? Explain. (28 marks)