In the Liquidity Trap Case Where the LM Schedule Is

question 42

Multiple Choice

In the liquidity trap case where the LM schedule is nearly horizontal,

• A)both monetary and fiscal policy are highly effective.
• B)monetary and fiscal policy are ineffective.
• C)monetary policy is ineffective and fiscal policy is effective.
• D)fiscal policy is ineffective and monetary policy is effective.

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Definitions:

Farm Products

Goods produced through agricultural activities, including crops, livestock, and other items derived from farming.

Freedom To Farm Act

A law passed in 1996 that revamped 60 years of U.S. farm policy by ending price supports and acreage allotments for wheat, corn, barley, oats, sorghum, rye, cotton, and rice.

U.S. Farm Subsidies

Government payments and financial support to farmers in the United States, aimed at stabilizing agriculture markets and incomes.

U.S. Farm Policy

A collection of laws and regulations that aim to support the agricultural sector in the United States through various means such as subsidies, price supports, and conservation initiatives.