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 Online Tutoring : Forum : Homework Help - Economics & Business Studies : Economics
Topic Topic: macroeconomics Post ReplyNew Question
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Joined: 20 September 2005
Posts: 1
Posted: 20 September 2005 at 12:43am | IP Logged Quote Caillou

The policy trilema refers to the conmtention that

Answer: you can choose more than one

a. a government cannot effectively have an impact on its national economy if it trades goods and assets with the rest of the world.

b. with international capital mobility, a government cannot simultaneously choose a monetary policy and exchange rate policy.

c. capital mobility means that a government cannot manage its exchange rate.

d. fiscal policy and monetary policy must be directed towards common exchange rate goal.

e. A government that chooses to restrict capital mobility may be able to control both the exchange rateand interest rates.    
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