In a Liquidity Trap

question 91

Multiple Choice

In a liquidity trap:

• A) fiscal policy becomes ineffective because of the high budget deficit.
• B) monetary policy becomes ineffective because the nominal interest rate is close to the zero bound.
• C) the aggregate price level becomes downwardly sticky.
• D) any increase in government spending drives out planned investment spending.

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Definitions:

Radical Connectivity

The extensive or extreme level of interconnection and accessibility between people, devices, and systems enabled by technology.

Gamification

The application of game-design elements and principles in non-game contexts to enhance engagement, motivation, and participation.

Discriminate

To make a distinction in favor of or against a person or thing based on the group, class, or category rather than according to actual merit; can also refer to the ability to perceive and distinguish differences.

Communication Process

The series of steps through which information is transmitted and received between senders and receivers.