The Liquidity Trap Occurs When

question 76

Multiple Choice

The liquidity trap occurs when:

• A) nominal interest rates are high.
• B) real interest rates are high.
• C) there is not enough money in bank vaults.
• D) the Fed interferes with market interest rates.
• E) there are too many excess reserves.

---

Definitions:

Anthropocentrism

The view that human beings are separate from, and above, the rest of nature.

Tar Sands

Naturally occurring mixtures of sand, clay, water, and a dense form of petroleum known as bitumen, considered significant sources of crude oil but with heavy environmental impacts.

Fresh Water

Water that is not salty and has little or no taste, color, or smell, typically found in rivers, lakes, and in underground reservoirs.

Treadmill of Production

A theory that explains the environmental degradation resulting from the endless pursuit of economic growth.