Error on graph run: "The xterm executable '' is missing."

Created a simple model with a file source and waterfall sink to check a recorded signal's frequency. When I ran the model, I got the following error:

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The xterm executable '' is missing.
You can change this setting in your gnuradio.conf, in section [grc], 'xterm_executable'.
(This message is shown only once)
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xterm is installed and "which xterm" says that it's at /usr/bin/xterm . GNU Radio should detect xterm when being installed, set the necessary setting and run without errors.

Also, the error message seems to be misleading (targetting a different distribution?): I don't have a gnuradio.conf, but I do have a /etc/gnuradio/conf.d/grc.conf which will probably do the trick.

In other words, a manual workaround is to edit grc.conf as suggested in the error message, but a user should not have to do this.

ProblemType: Bug
DistroRelease: Ubuntu 18.04
Package: gnuradio 3.7.11-10 [modified: usr/share/mime/application/gnuradio-grc.xml]
ProcVersionSignature: Ubuntu 4.15.0-108.109-generic 4.15.18
Uname: Linux 4.15.0-108-generic x86_64
ApportVersion: 2.20.9-0ubuntu7.15
Architecture: amd64
CurrentDesktop: ubuntu:GNOME
Date: Tue Jul 7 12:03:47 2020
InstallationDate: Installed on 2017-02-18 (1234 days ago)
InstallationMedia: Ubuntu 14.04.5 LTS "Trusty Tahr" - Release amd64 (20160803)
SourcePackage: gnuradio
UpgradeStatus: Upgraded to bionic on 2020-05-10 (57 days ago)