Under a system of fixed exchange rates where the foreign exchange market is in equilibrium and neither country has a balance-of-payments deficit or surplus,an increase in imports of French goods by Japanese consumers,ceteris paribus,would result in a

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An increase in imports by Japanese consumers would lead to an outflow of yen to purchase French goods, creating a balance-of-payments deficit for Japan as more currency leaves the country than enters.

Under a System of Fixed Exchange Rates Where the Foreign