In our discussion of short-run exchange rate overshooting, we assumed real output was fixed. Assume instead that an increase in the money supply raises real output in the short run.

a)Explain with the help of a figure, the transition to long run equilibrium if the exchange rate overshoots relative to its long run value

For part assume an increase in money supply.

for the diagrams please include a money supply diagram, dollar interest rate, dollar price level, dollar/euro exchange rate and a standard graph showcasing the transition to long-run equilibrium (which contains the euro return, exchange rate, and money supply at the bottom). Here are some examples of the graph, please provide a detailed explanation if possible.