In Liquidity Trap Caused by Deficient Financial Liquidity,the Central Bank

question 18

Multiple Choice

In liquidity trap caused by deficient financial liquidity,the central bank action that matters is

• A) open market purchases of government bonds.
• B) the interest rate charged on reserves.
• C) the interest rate charged on government bonds.
• D) open market sale of government bonds
• E) quantitative easing.

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Definitions:

Social Facilitation

The phenomenon that individuals perform tasks better or differently when in the presence of others, due to increased arousal and motivation.

Empirical Studies

Research that is based on observation or experience rather than theory or pure logic.

Performance

Refers to the act of carrying out or accomplishing an action, task, or function, often evaluated in terms of its efficiency, effectiveness, and quality.

Social Facilitation

The enhancement of performance in the presence of others, typically observed in tasks that are simple or well-rehearsed.