Evidence Suggests That a Liquidity Trap Is Possible When

question 85

Multiple Choice

Evidence suggests that a liquidity trap is possible when

• A)real interest rates are at zero.
• B)real interest rates are at or just above zero.
• C)nominal interest rates are at zero.
• D)nominal interest rates are at or just above zero.

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Definitions:

McClelland's Theory

A motivational theory suggesting that people are driven by needs for achievement, power, and affiliation, influencing their behavior and performance.

Comparison Person

An individual used as a benchmark to evaluate one's own situation, achievements, or performance in social comparison theory.

Need for Achievement

A psychological trait that drives individuals to succeed, accomplish challenging tasks, and set high standards for themselves.

Needs for Affiliation

The desire to form connections with others and maintain social relationships.