Poland and Estonia are dierent in that Estonia xes its currency to the German DM, and Poland has a exible exchange rate. Use IS-LM-FX model to discuss how the eects of the shock dier on the two countries' levels of output, exchange rate, and trade balance. Is there a benet to having a exible exchange rate or pegging? Explain carefully. A. Poland and Estonia both are experiencing a fall in foreign demand for their goods, due to the recession beginning in Germany (It is assumed that German interest rate is constant). B. Poland and Estonia both are experiencing an increase in money demand, due to the unsta- ble nancial market