The liquidity trap, The liquidity trap

The liquidity trap

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Reference no: EM131107901

The liquidity trap

A. Refers to the vertical portion of the money demand curve.

B. Refers to the possibility that interest rates may not respond to changes in the money supply.

C. Implies that people are willing to hold very limited amounts of money at low interest rates.

D. Occurs when people wish to hold more and more money as interest rates fall.

Reference no: EM131107901

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