Answer to Question #50524 in Microeconomics for nidhi
three of the following at the same time:
- A fixed exchange rate
- Free capital movement (absence of capital controls)
- An independent monetary policy
It is both a hypothesis based on the uncovered interest rate parity
condition, and a finding from empirical studies where governments that
have tried to simultaneously pursue all three goals have failed.
So, this statement is true.
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