A liquidity trap is
a. the vertical portion of the LM schedule.
b. the horizontal portion of the LM schedule.
c. a situation where a given change in the money stock induces a large reduction in the interest rate.
d. Both a and c
e. Both b and c
B
You might also like to view...
A decrease in the demand for U.S. exports ________ the demand for U.S. dollars and shifts the demand curve for U.S. dollars ________
A) increases; rightward B) decreases; rightward C) decreases; leftward D) increases; leftward
Price discrimination is welfare reducing
A) False, price discrimination can increase the coverage of a market thereby increasing welfare. B) False, price discrimination limits the coverage of a market thereby increasing welfare. C) True, price discrimination limits the coverage of a market thereby increasing welfare. D) True, price discrimination can increase the coverage of a market thereby increasing welfare.