Read each part of the question very carefully. Show all steps of your calculations to get full marks. Keep at least 4 digits after the decimal point, if applicable, in each step of your calculations. Write down the formula that you are using to find the answers to each part of this question.

Imagine a world before automatic teller machines (ATMs) were invented so if you needed cash you had to wait in a long line at the bank for a teller. Consider the model of exchange rate determination with short-run nominal rigidities and in which money market equilibrium holds every period, UIRP holds every period, and PPP holds in the long-run. Assume that the economy is initially in the long-run equilibrium.

Now suppose that ATMs are introduced in the home country so the home demand for real balances decreases (that is, for the same interest rate and output level, people want to hold less money than before ATMs were invented). Assume that this invention does not change consumers discount rates nor does it change real output. Assume further that ATMs are not introduced into the foreign country.

Explain what happens to home and foreign interest rates, home and foreign prices, and the exchange rate (measured as units of home currency per one unit of foreign currency) in the short- , medium-, and long-run when ATMs are invented. Support your answer with a graph of the home money market equilibrium and a graph of the foreign exchange market equilibrium.

Please hel me understand this with details including step-by-step breakdown of how to solve it so I can study