In a Liquidity Trap,monetary Policy Has ________ Effect on Aggregate

question 34

Multiple Choice

In a liquidity trap,monetary policy has ________ effect on aggregate spending because a change in the money supply has ________ effect on interest rates.

• A)no;no
• B)no;a large
• C)no;a small
• D)a large;a large

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Definitions:

Overly Optimistic

The tendency to hold an excessively positive outlook on one's abilities, outcomes, or future events.

Zeigarnik Effect

The psychological phenomenon whereby individuals remember uncompleted or interrupted tasks better than completed ones.

Achievement

The accomplishment of an aim or purpose, often recognized because of effort or skill.

Goals

Goals or intended results that a person or a team strives to accomplish.