When Interest Rates Are Very High, the Economy Is in a Liquidity

question 61

True/False

When interest rates are very high, the economy is in a liquidity trap, and monetary policy may be ineffective in fighting a recession.

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Definitions:

Y-axis

The vertical axis in a graph or chart, typically used to represent the variable being measured or observed.

Graph

A visual representation of data designed to communicate information clearly and efficiently.

Frequency Distribution

The organization of raw data in table form, showing how frequently each value in a set of data occurs.

Communicate

The act of conveying information or expressing thoughts and feelings through speech, writing, signals, or other means.