523EconomicsMedium
Under a pegged exchange rate system which does not explain why a country would have a balance of payments deficit?
Atechnological advance is superior abroad
Bvery high rates of inflation occur domestically
Cforeigners discriminate against domestic products
Dthe domestic currency is undervalued relative to other currencies
Correct answer
D. the domestic currency is undervalued relative to other currencies
Explanation
The correct answer is the domestic currency is undervalued relative to other currencies.