It is not possible to have at the same time:
A) fixed exchange rates and perfect capital mobility.
B) fixed exchange rates and monetary sovereignty.
C) perfect capital mobility and monetary sovereignty.
D) fixed exchange rates, perfect capital mobility and monetary sovereignty.

Question

Quizplus · Accepted Answer

The concept known as the "impossible trinity" or the "trilemma" in international economics states that it is not possible to have all three of the following at the same time: fixed exchange rates, perfect capital mobility, and monetary sovereignty. A country can only have two of the three.

It Is Not Possible to Have at the Same Time