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International variables are linked through trade and financial flows. Therefore, what trilemma is faced by a nation that wishes to keep its exchange rates with
International variables are linked through trade and financial flows. Therefore, what trilemma is faced by a nation that wishes to keep its exchange rates with other nations fixed?
a | It can have fixed exchange rates only when it allows free flows of capital and maintains control of its interest rates. |
b | If it wants to control its own monetary policy under fixed exchange rates, then it must restrict foreign investment. |
c | Fixed exchange rates are not possible if the nation also wants to control its monetary policy. |
d | Fixed exchange rates are not possible if the nation allows free flows of capital both into and out of the nation. |
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