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Draw Me The Economy: Money Supply

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By Dessine-moi l'éco on youtube.com

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In this step you'll learn about money supply and finding the right balance. Money supply is the total value of bills of exchange issued by banks and is created when a bank grants a loan using an accounting entry. Central banks control the amount of money in circulation by changing the key interest rate, which affects the rate at which banks lend out money. A target inflation rate of between two and four percent is ideal for keeping an economy running smoothly.

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