Please answer this question in complete detail. Also show working. Support the answer with diagram.

A. Suppose that Covid-19 outbreak in Pakistan leads to 60% decrease in imports of goods (consumer goods and capital goods) and services and 65 % increase in exports of goods (consumer goods and capital goods) services over the period. What would likely happen to exchange rate for domestic currency (PKR) compared to foreign currency, say, US dollar, holding everything else constant? Explain your answer with diagram. No marks without appropriate diagram. B. SBP has now cut the policy rate by a huge 525 basis points, from the relatively high 13.25 % to 8 %. What will be the possible impact of sharp decrease in policy rate on Rupees /U.S. dollar exchange rate, ceteris paribus? Explain your answer with diagram. No marks without diagram C. Inflation impacts the cost of living, the cost of doing business, borrowing money, mortgages, corporate, and government bond yields, and every other facet of the economy. Central banks around the world view stable and low inflation as a very important goal. Assume a developing country gets inflation under control and the inflation rate decreases substantially. What would happen to money market equilibrium interest rate, ceteris paribus? Explain your answer with diagram. No marks without diagram