Economics · Macroeconomics
A country experiencing volatile capital flows is assessing the implications of the Impossible Trinity (Mundell-Fleming Trilemma). In this context, consider the following statements: 1. A country cannot simultaneously maintain a fixed exchange rate, free capital mobility, and an independent monetary policy. 2. Full capital mobility automatically ensures long-term exchange rate stability. 3. Under a fixed exchange rate regime with free capital mobility, a country's monetary policy autonomy is constrained. Which of the statements given above are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 12 and 3 only
- 21 and 3 only✓
- 31 and 2 only
- 41 only
Correct answer
1 and 3 only
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Macroeconomics MCQs →Want more practice questions on Macroeconomics?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Macroeconomics