A country that operates a fixed exchange rate cannot pursue an independent monetary policy.

Name: A country that operates a fixed exchange rate cannot pursue an independent monetary policy.
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Question

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When a country operates a fixed exchange rate, its central bank needs to buy or sell its own currency in order to maintain the fixed rate. This can limit the central bank's ability to control its money supply and interest rates, which are key tools in implementing an independent monetary policy.

A Country That Operates a Fixed Exchange Rate Cannot Pursue