What is a liquidity trap? What are the implications of a liquidity trap on monetary policy?
What will be an ideal response?
A liquidity trap is a situation in which money created by the Fed to stimulate the economy is hoarded rather than being put to use. The liquidity trap renders monetary policy useless.
Economics
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Most savers:
A. lend their money directly. B. do not use proxies to decide who to lend their money to. C. deposit their savings into banks, retirement accounts, and life insurance companies. D. All of these are true.
Economics
Among the methods of nonprice rationing are
A. waiting in line. B. coupons. C. favored customers. D. all of the above
Economics