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Banking and Money (Khan Academy)

Why Not Just Target the Money Supply?

If you fix the amount of money, good projects miss out in spring and bad ones get money in autumn. So fix the interest rate instead.

18 min145 XP available5 challenges

Pick the best answer

Imagine the amount of money never changes. In planting season, there are more good projects than money to pay for them. After the season, there are far fewer projects. What goes wrong?

Answer to continue.