e various currencies on the continent to fluctuate (Petruno, 1995, p. D3). The result at that time was that Sweden and Britain (among others) let their currencies fall in value while the German mark rose. The international community generally espouses the ideal of stable exchange rates, because of the benefits to trade, but individual nation's economic conditions make this a difficult goal to achieve. The world's strong economies, those with budget surpluses, trade surpluses and low inflation, attract more investment and thus enjoy stronger currencies.
It is the effect on trade that causes concern when a major currency, such as the dollar, falls in value (Zimmerman, May 11, 1993, p. 2A). As a currency falls, that nation's exports become less expensive relative to goods from nations with strong currencies. Conversely, imports from nations with strong currencies increase in price relative to domestic goods. In this way, the current devaluation of the dollar results in the apparent increase in prices of Japanese goods relative to American goods in the world market. Within the American economy, this can be an inflationary factor since American producers may increase their prices to ke
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