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During Britain's Brief Alignment with the ERM from 1990-1992, the Trilemma

Question 54

Multiple Choice

During Britain's brief alignment with the ERM from 1990-1992, the trilemma tells us that monetary policy authority no longer existed in Britain. Why?


A) Britain could print more pounds, but could not increase its gold stock.
B) Britain kept monetary growth rates at zero.
C) The British interest rate equaled the German rate to attain uncovered interest parity.
D) The British could lower unemployment using other means such as fiscal policy.

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