From 1994 to 2005,China chose to have ________ and ________ and therefore,could not have free capital mobility at the same time.

Question

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From 1994 to 2005, China had a fixed exchange rate and an independent monetary policy. Choosing a fixed exchange rate means that the government determines the value of the currency relative to other currencies, and this requires intervention in the foreign exchange market. On the other hand, having an independent monetary policy means that the government can control the money supply and interest rates to achieve macroeconomic objectives such as price stability and economic growth. However, having both a fixed exchange rate and free capital mobility is not feasible, because it would require the government to give up its ability to control monetary policy. With a fixed exchange rate, the government must intervene in the foreign exchange market to maintain the pegged exchange rate, and this requires restrictions on capital flows. As a result, China did not have free capital mobility during this period.

From 1994 to 2005,China Chose to Have ________ and ________

From 1994 to 2005,China Chose to Have and