A Liquidity Trap Occurs When the

question 34

Multiple Choice

A liquidity trap occurs when the

• A)LM curve is steep.
• B)LM curve is vertical.
• C)LM curve is relatively flat.
• D)IS curve is flat.

---

Definitions:

Subjective Norms

Individual's perceptions of social pressure to perform or not perform a particular behavior, influenced by family, friends, and society.

Theory Of Planned Behavior

A psychological theory that links beliefs and behavior, suggesting that an individual's behavioral intentions are shaped by their attitudes towards the behavior, subjective norms, and perceived control over the behavior.

Intention To Act

A mental state that represents a commitment to carrying out an action or actions in the future.

Subjective Norms

Beliefs about the social pressures to perform or not perform a particular behavior, which can influence an individual's actions.