The authors discuss the concept of the "Impossible Trinity" or the inability to achieve simultaneously the goals of exchange rate stability, full financial integration, and monetary independence. If a country chooses to have a pure float exchange rate regime, which two of the three goals is a country most able to achieve?

Question

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With a pure float exchange rate regime, a country can achieve full financial integration and monetary independence, as the exchange rate is allowed to fluctuate freely without the need for central bank intervention.

The Authors Discuss the Concept of the "Impossible Trinity" or the Inability