A country with a fixed exchange rate will have a balance-of-payments deficit when its exchange rate

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When a country has a fixed exchange rate, it is determined by the government or central bank and may not reflect the fundamental value. An overvalued exchange rate may lead to a deficit in the balance of payments because the country's exports become more expensive, while its imports become cheaper. This leads to a decrease in demand for exports and an increase in demand for imports, which ultimately results in a deficit.

A Country with a Fixed Exchange Rate Will Have a Balance-Of-Payments