# 602.3 Lesson - impossibleTrinity

**Screen:** impossibleTrinity

**Headline:** The Impossible Trinity

**Reward:** 3

**Text:** The Impossible Trinity, also known as the Mundell-Fleming Trilemma, is a concept that explains the trade-offs involved in setting international monetary policy for a sovereign nation.

It says that a country can only choose two of the following three options: fixed exchange rates, free capital flows, and independent monetary policy.

These three options cannot be pursued at the same time. This is because a country's capital flows, or the movement of money in and out of the country, can be influenced by the value of its currency and its monetary policy, which sets the rules for how much money is in circulation.

As capital becomes more mobile and can move freely across borders, it is harder for a country to control and direct its capital flows. The rise of bitcoin, a digital currency that is borderless and immune to changes in value, may further challenge a country's ability to set monetary policy.

\=================================================================

## QUIZ

**Question:** How does the existence of Bitcoin affect the Mundell-Fleming-Trilemma?

**Answer:** As perfectly mobile capital, Bitcoin alters the logic of sovereign nations to direct international monetary policy by making capital controls impossible to enforce.

**Feedback:** enforce.

**Correct:** true

**Answer:** Due to its fixed supply, the existence of Bitcoin makes it easier for sovereign nations to set fixed exchange rates.

**Feedback:** The 21 million cap is indeed quite fascinating, but the existence of Bitcoin actually makes it more difficult for nations to set fixed exchange rates. Try again

**Correct:** false

**Answer:** Governments will restrict discussion of the Mundell-Fleming Trilemma because speech is easier to censor than cross-border payments.

**Feedback:** While that's entirely possible of course, that's not the most likeliest outcome here. Try again!

**Correct:** false

<figure><img src="/files/fnAwMnkvdvraJf013tvk" alt=""><figcaption></figcaption></figure>


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://earn.blink.sv/chapter-602-bitcoin-and-economics-ii/602.03-lesson-impossible-trinity.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.