Ceteris paribus,with a fixed exchange rate,if Americans decide to buy more Japanese-made television sets,this causes a market ________ of Japanese currency and creates a balance-of-payments ________ for the United States.

Question

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When Americans buy more Japanese-made television sets, they need more Japanese currency to make these purchases, leading to a market shortage of Japanese currency due to increased demand. Simultaneously, the United States will experience a balance-of-payments deficit because more money is leaving the country to pay for these imports than is coming in.

Ceteris Paribus,with a Fixed Exchange Rate,if Americans Decide to Buy