my question:

1. Intuitively explain the following formula that describes trade balance between the Euro area and the UK and that was discussed in class P* NX =Ex PImports from EA in Pounds pImports from UK in Euros P Ex* P pImports from UK in Euros 2. What is the producer-currency pricing (PCP) assumption? How do changes in Euro-pound nominal exchange rate E affect NX, Ex, Im in this case? 3. What is the local-currency pricing (LCP) assumption? How do changes in Euro- pound nominal exchange rate E affect NX, Ex, Im in this case? 4. What is the dominant currency pricing (DCP) assumption? How do changes in Euro-pound nominal exchange rate E affect NX, Ex, Im in this case