Which of the Following Will Occur When an Economy Is

question 67

Multiple Choice

Which of the following will occur when an economy is faced with a liquidity trap situation?

• A)A reduction in the price level will cause a rightward shift in the aggregate demand curve.
• B)A reduction in the price level will cause a leftward shift in the aggregate demand curve.
• C)The aggregate demand curve is now vertical.
• D)The aggregate demand curve is now upward sloping.

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