The following is the general structure of foreign exchange market and money market. The following is based on the asset approach 1) Foreign exchange market; The equilibrium is based on the interest parity condition; R=R+EEeE 2) Money market is governed by the money demand and money supply.; PM=L(R,Y)=10R+ 0.01Y 6-a; Given Ms=900,P=100,Y=1,000,R=8%,Ee=1.1, then what is the equilibrium foreign exchange rate E ? 6-b; If money supply Ms increases permanently what is happening the equilibrium foreign exchange rate E ? Show the change of the foreign exchage rate by a graph. Moreover explain the overshooting of the foreign exchagne rate