Which of the following three goals that make up the policy trilemma can be achieved at the same time in China?
A) exchange rate stability and free capital flows
B) monetary policy independence and exchange rate stability
C) free capital flows and monetary policy independence
D) exchange rate stability, free capital flows, and monetary policy independence

Question

Quizplus · Accepted Answer

China has managed to achieve exchange rate stability and monetary policy independence by implementing a managed exchange rate system. However, free capital flows are restricted in China and are subject to government controls. Therefore, it is impossible to achieve all three goals simultaneously.

Which of the Following Three Goals That Make Up the Policy