Inconsistent trinity

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Inconsistent Trinity (or Impossible Trinity) is a term used in the macroeconomic policies for an open economy. It represents the impossibility for a country simultaneously to maintain a fixed exchange rate, to permit free capital flows, and to have a monetary policy directed toward domestic objectives. It could be graphically depicted as a triangle with points A, B and C being "fixed exchange rate", "free capital mobility", and "sovereign monetary policy". In this case the feasible regions are any combinations of two of the above-mentioned conditions.

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