The demand for euros in the foreign exchange market equals 8,000 - 2,000 e and the supply of euros in the foreign exchange market equals 3,000 + 3,000 e, where e is the nominal exchange rate expressed in U.S. dollars per euro. If the euro is fixed at 0.85 U.S. dollars per euro, then the euro is ________ and Euroland has a balance-of-payments ________.

A. overvalued; deficit of 750 euros
B. undervalued; surplus of 750 euros
C. undervalued; deficit of 750 euros
D. overvalued; surplus of 750 euros

Answer: B