At what rate of interest does the liguidity trap emerge

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Reference no: EM13222376

The following data descibes market conditions:
Money Supply (in billion) 100 200 300 400 500 600 700

Interest Rate: 8 7.5 7 6.5 6 5.5 5

Rate if investment (billions)$12 $12 $15 $16 $17 $17 $17

(a) At what rate of interest does the liguidity trap emerge?

(b) At what what of interest does the investment demand become totally inelastic?

Reference no: EM13222376

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