In the context of international finance, the 'Trilemma' or 'Impossible Trinity' implies that a country must choose:
A. Only one of the three
B. None of the three
C. All three simultaneously
D. Two out of the three: fixed exchange rate, free capital mobility and monetary-policy independence
Answer: Option D
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.
No comments yet. Be the first to start the discussion!