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In a fixed-exchange-rate system, if the government takes no action, an increase in the world demand for domestic goods will reduce net exports and create

In a fixed-exchange-rate system, if the government takes no action, an increase in the world demand for domestic goods will reduce net exports and create an undervalued domestic currency reduce net exports and create an overvalued domestic currency increase net exports and create an overvalued domestic currency increase net exports and create an undervalued domestic currency

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