The Trilemma or Impossible Trinity in international macroeconomics states that a country cannot simultaneously maintain:

ALow inflation, high employment, and budget surplus

BHigh tariffs, free trade, and exchange stability

CHigh growth, low interest, and balanced trade

DFixed exchange rate, free capital mobility, and independent monetary policy

Explanation

The Policy Trilemma proves a nation can choose only two of three: fixed exchange rate, monetary autonomy, and open capital markets.

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