An economic condition in which a trade deficit causes a permanent negative shift in a country's balance of payments is called ________.

Question

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Fundamental disequilibrium refers to a trade deficit that causes a persistent imbalance in a country's balance of payments, leading to a long-term decrease in the value of its currency. The other options are not directly related to this concept. Revaluation refers to an increase in the exchange rate of a currency. The managed float system is a type of exchange rate regime in which the government intervenes in the market to influence the exchange rate. The Fisher effect is a theory that suggests that changes in expected inflation rates will affect nominal interest rates, but not real interest rates.

An Economic Condition in Which a Trade Deficit Causes a Permanent