The "impossible trinity" should the relationship between
A) free movements of international capital
B) independent monetary policies of countries
C) fixed exchange rate systems of countries
D) all of the above

Question

Quizplus · Accepted Answer

The impossible trinity (also known as the trilemma) states that a country can only achieve two out of the three policy goals: free movements of international capital, independent monetary policies, or fixed exchange rate systems. Therefore, the correct answer is all of the above (A, B, and C). Trying to achieve all three policy goals simultaneously is impossible because, for example, if a country wants to maintain a fixed exchange rate system, they will have to give up control over monetary policy and the free movement of international capital, which is not feasible.

The "Impossible Trinity" Should the Relationship Between