Assuming the free flow of capital across borders, which of the following statements is most correct?
A. A central bank cannot have both a fixed exchange rate and an independent inflation policy.
B. The central banks of most industrialized countries focus on fixed exchange rates.
C. While most central banks of industrialized countries favor fixing exchange rates, their primary concern is on domestic inflation.
D. A central bank can have both a fixed exchange rate and an independent inflation policy.
Answer: A
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