Economics · International Macroeconomics
The 'Impossible Trinity' (Mundell's Trilemma) in international macroeconomics states that a country CANNOT simultaneously maintain:
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- 1Capital account convertibility, fiscal balance, and a current account surplus.
- 2Full employment, low inflation, and a balanced current account.
- 3Free trade in goods, a floating exchange rate, and price stability.
- 4Free capital mobility, a fixed exchange rate, and an independent monetary policy.✓
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Free capital mobility, a fixed exchange rate, and an independent monetary policy.
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