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Impossible trinity principle states that only two of the three following features are compatible with each...

Impossible trinity principle states that only two of the three following features are compatible with each other:

Group of answer choices

A)Flexible exchange rate, full capital mobility and monetary policy autonomy

B)Flexible exchange rate, limited capital mobility and monetary policy autonomy

C)Fixed exchange rate, limited capital mobility and monetary policy autonomy

D)Fixed exchange rate, full capital mobility and monetary policy autonomy

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D)Fixed exchange rate, full capital mobility and monetary policy autonomy

The impossible trinity is a concept of internation economics according to which it is impossible to achieve Fixed exchange rate, full capital mobility and monetary policy freedom at the same time . However any two of the three are attainable . The three are not achievable a t a time as there will be mutual exclusivity. IF a country wants to have a fixed exchange rate system and free flow of capital , the Independent monetary policy s unachievable as it is difficult to set domestic interest rates different from world exchange rates Similarly, an independent monetary policy cannot be achieved without capital controls.

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