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:

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pertains to individual information concerning financial status, including income, investments, debts, and spending habits.

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The right of individuals to keep their personal affairs private and free from the intrusion of others, including the government.

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Communication (such as advertising) that is done on behalf of a company or individual for the intent of making a profit.

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