Question
Why does a country with a fixed exchange rate and free capital mobility lose monetary policy independence?
Tap to flip
Answer
Because defending the peg forces interest rates to align with capital-flow pressures.
Tap to flip back
Question
How can a financial geopolitical tool affect capital flows?
Tap to flip
Answer
It can deter or block cross-border financing and investment.
Tap to flip back
Question
How can technology export controls affect global trade and investment?
Tap to flip
Answer
They restrict market access and disrupt cross-border supply chains.
Tap to flip back
Question
How does exchange rate targeting constrain a country's policy choices?
Tap to flip
Answer
It sacrifices monetary policy autonomy under the Mundell trilemma.
Tap to flip back