The Authors Discuss the Concept of the "Impossible Trinity" or the Inability

question 12

Multiple Choice

The authors discuss the concept of the "Impossible Trinity" or the inability to achieve simultaneously the goals of exchange rate stability, full financial integration, and monetary independence. If a country chooses to have a pure float exchange rate regime, which two of the three goals is a country most able to achieve?

• A) monetary independence and exchange rate stability
• B) exchange rate stability and full financial integration
• C) full financial integration and monetary independence
• D) A country cannot attain any of the exchange rate goals with a pure float exchange rate regime.

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Definitions:

Oversight

The process of supervising, monitoring, and potentially directing activities or operations, usually in the context of governance or management.

Executive Agencies

Parts of the government under the direct authority of the President or the executive branch, responsible for the enforcement of laws.

Accountability

The obligation of individuals or organizations to account for their activities, accept responsibility for them, and disclose the results in a transparent manner.

House Oversight

A function of the United States House of Representatives that involves monitoring and supervising federal agencies, programs, activities, and policy implementation.