The Existence of a Liquidity Trap Implies That A(n)

question 83

Multiple Choice

The existence of a liquidity trap implies that a(n) :

• A) increase in the money supply will not lower interest rates.
• B) decrease in the money supply will not lower interest rates.
• C) decrease in the interest rate will be matched by a corresponding decrease in investment.
• D) increase in the money supply leads to inflation.

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Definitions:

Energetic

Displaying or characterized by a high level of activity, enthusiasm, or vitality.

Guilty

A state of having committed a specific or implied offense or crime, leading to feelings of responsibility and remorse.

Anxious

A state of feeling excessive worry, unease, or nervousness, often about an imminent event or something with an uncertain outcome.

Raymond Cattell

A psychologist known for his research in personality, intelligence testing, and the development of the 16 Personality Factors (16PF) questionnaire.