In the context of international finance, the 'Trilemma' or 'Impossible Trinity' implies that a country must choose:
A. All three simultaneously
B. Two out of the three: fixed exchange rate, free capital mobility and monetary-policy independence
C. None of the three
D. Only one of the three
Answer: Option B
Solution (By JKSSB Mock Tests)
The trilemma states that only two of the three policy goals—exchange-rate stability, capital-market openness and monetary independence—can be achieved at the same time.
Explanation:
GST is largely regressive because lower-income groups spend a higher proportion of their income on consumption, bearing a relatively higher tax burden compared to higher-income groups.
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