In a Liquidity Trap,monetary Policy Has ________ Effect on Aggregate

question 34

Multiple Choice

In a liquidity trap,monetary policy has ________ effect on aggregate spending because a change in the money supply has ________ effect on interest rates.

• A)no;no
• B)no;a large
• C)no;a small
• D)a large;a large

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Definitions:

Common Stock

Common stock represents ownership shares in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Par Value

A nominal value assigned to share of stock in the charter of a corporation, unrelated to market value.

Legal Expense

Costs incurred in the process of legal advice, litigation, or other legal services.

Paid-In Capital

Funds raised by a company through the sale of its shares to investors, over and above the par value of these shares.