In the Liquidity Trap,monetary Policy

question 57

Multiple Choice

In the liquidity trap,monetary policy

• A)has a large impact on interest rates.
• B)has a small impact on interest rates.
• C)has no impact on interest rates.
• D)has a proportionate impact on interest rates.

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Definitions:

Authorization

The formal permission granted by a competent authority to carry out a specific action or process.

Principal

The amount of money originally invested or loaned, on which basis interest and returns are calculated.

Agent's Contract

A legal agreement that specifies the rights and obligations of an agent acting on behalf of another party, the principal.

Bound

Being legally or morally obligated to do something or restricted by some form of constraint.