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The "unholy trinity," "impossible trinity," or the "policy Trilemma" are all synonyms for the concept that...

The "unholy trinity," "impossible trinity," or the "policy Trilemma" are all synonyms for the concept that a country must choose two of three monetary policy goals, but it can never have all three (exchange rate stability, private capital mobility, monetary policy autonomy) . For the following countries identify what two policy goals their current (last 20 years) monetary policy reflects and explain your reasoning: U.S., China, and France .

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Answer #1

Monetary policy in US has aimed at inflation targeting and monetary policy autonomy over government to help stimulate economy and increase overall liquidity.

Monetary policy in China is aimed at exchanges rate stabilisation of yuan versus dollar, and is aimed perfect capital mobility to increase overall consumption and spending in economy and grow at highest rate.

Monetary policy in Frnace foo is aimed at targeting exchange rate stability and perfect capital mobility to curb excessive devaluation of their currency Franc and enhance capital inflows.

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