When Interest Rates Are Very High, the Economy Is in a Liquidity

question 61

True/False

When interest rates are very high, the economy is in a liquidity trap, and monetary policy may be ineffective in fighting a recession.

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Definitions:

Cluster Suicides

Several suicides committed by members of a group within a brief period.

Major Depression

Feelings of hopelessness, lethargy, and worthlessness that last two weeks or more.

Clinical Depression

A serious mental health condition characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities, often requiring medical treatment.

Rumination

The process of continuously thinking about the same thoughts, which tend to be sad or dark.