Under a fixed exchange rate system, if the inflation rate of the United States is less than the inflation rate of other nations, the

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Under a fixed exchange rate system, the value of the currency is fixed against a foreign currency or a basket of currencies. If the inflation rate of the United States is less than the inflation rate of other nations, the goods and services produced in the United States will become relatively cheaper compared to those produced in other countries. This will lead to an increase in demand for US goods and services, resulting in a trade surplus.

Under a Fixed Exchange Rate System, If the Inflation Rate