Question: Question is from study unit 5, on exchange rate and foreign trade. Exchange rates plays an important role in a country's trade performance. Studies show

Question is from study unit 5, on exchange rate and foreign trade. Exchange rates plays an important role in a country's trade performance. Studies show that a weaker domestic currency stimulates exports and makes imports more expensive and a strong domestic currency hampers exports and makes imports cheaper. How does the fixed exchange rate of one country distorts trade and investment flows with its trading partners?

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