International Variables Are Linked Through Trade and Financial Flows

Multiple Choice

International variables are linked through trade and financial flows. Therefore, what trilemma is faced by a nation that wishes to keep its exchange rates with other nations fixed?

A) It can have fixed exchange rates only when it allows free flows of capital and maintains control of its interest rates.
B) If it wants to control its own monetary policy under fixed exchange rates, then it must restrict foreign investment.
C) Fixed exchange rates are not possible if the nation allows free flows of capital both into and out of the nation.
D) Fixed exchange rates are not possible if the nation also wants to control its monetary policy.