When Seeking to Explain the Low Interest Rates in 2005

question 16

Multiple Choice

When seeking to explain the low interest rates in 2005, the article "Excess Savings or Excess Liquidity?" makes the case that

• A)excess liquidity is the primary cause since it would cause LM to shift downward leading to low interest rates and higher GDP
• B)excess liquidity is the primary cause since it would cause IS to shift downward leading to low itnerest rates and lower GDP
• C)excess savings is the primary cause since it would cause LM to shift downward leading to low interest rates and higher GDP
• D)excess savings is the primary cause since it would cause IS to shift downward leading to low interest rates and lower GDP

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Definitions:

Spreads

Refers to the difference between two measurements, such as bid and ask prices in trading, or to the expansion of an entity or idea across different areas.

Equal Ability

The concept that individuals or groups possess the same level of skill, talent, or capability in a particular area or in general.

Variety Of Conditions

A broad spectrum or range of circumstances, situations, or health disorders.

Repeatedly

Doing something over and over again.