The United States chooses to have ________ and ________ and therefore,cannot have a fixed exchange rate at the same time.

Question

Quizplus · Accepted Answer

The United States has chosen to have free capital mobility and an independent monetary policy, which means that it cannot have a fixed exchange rate at the same time. With free capital mobility, capital flows in and out of the country without restrictions, which makes it impossible to control the exchange rate. At the same time, an independent monetary policy allows the central bank to adjust interest rates to achieve economic goals such as price stability or full employment, which can also have an impact on the exchange rate. Therefore, a fixed exchange rate cannot be maintained in such a scenario.

The United States Chooses to Have ________ and ________ and Therefore,cannot

The United States Chooses to Have and and Therefore,cannot