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Liquidity Trap
A scenario where low interest rates and high savings rates make it difficult for monetary policy to boost economic growth.
Speculative Demand
The demand for goods, services, or assets based not on their fundamental value but on the expectation that their price will increase in the future.
Precautionary Demand
The demand for liquid assets or money for the purpose of meeting unforeseen emergencies or taking advantage of unexpected opportunities.
Liquidity Trap
A situation where low interest rates fail to increase lending and economic growth due to people preferring to hold onto cash.
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