Ａ　country with fixed exchange rates goes through a long period in which the fixed exchange rate stays above the market-determined rate. Using diagrams explain the effects of this situation on :

I, the foreign exchange reserves of the central bank

2,the money supply

3 the balance of payments

The government of the country the decides to switch to a floating exchange rate regime.

Explain what will happen, ceteris paribus,to:

1,the exchange rate

2, the balance of payments

3, the foreign exchange reserves of the central bank and

4, the money supply

Some time later, speculators in the foreign exchange exchange market come to the view that the switch frome fixed to

floating exchange rates has occurred smoothy and that it will cause an appreciation of the country's currency in the

near future.Analyze what will happen to

1 the exchange rate

2 the capital account and

3 the current account

Is it possible that changes to Monetary Policy change the supply and demand for foreign exchange?