Which of the following is true about monetary policy in the liquidity trap?

A. An expansion of the money supply will have the large effect of raising interest rates when the economy is in the liquidity trap.
B. Monetary policy will be unable to reduce interest rates further to stimulate investment.
C. The demand for money is interest-inelastic in the liquidity trap.
D. The opportunity cost of holding money is relatively high at interest rates implied by the liquidity trap.

Answer: B