QUESTION-8: [5 Marks]. Discuss the effect of an increase in domestic income (output) on nominal exchange rate. What would be the policy response from the central bank under the xed and exible exchange rate scenarios? Discuss. Draw a diagram to explain your answer. [5 Marks]. [Note: You could draw the diagram either using Microsoft Word tools or with a hand on a piece of paper and then take a scan (photo) and paste it in this document]