Problem
1. How is the deflationary policy of a strong country transmitted through a fixed exchange rate system?
2. Why might a revaluation of a currency only temporarily reduce a Balance of Trade surplus?
3. Why does a wide band around fixed exchange rate parities (as with the 15 per cent band in use in the EMS between 1993 and the end of 1998) make life more difficult for currency speculators?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.