'Liquidity trap' is a situation in which:

Question

TuteeHUB · Accepted Answer

there is an excess of foregin exchange reserves in the economy leading to excess of money supply

TuteeHUB · Answer

people want to hold only cash because prices are falling everyday

TuteeHUB · Answer

people want to hold only. cash because there is too much of liquidity in the economy

TuteeHUB · Answer

the rate of interest is so low that no one wants to hold interest bearing assets and people wants to hold cash

1.	'Liquidity trap' is a situation in which:
A.	people want to hold only cash because prices are falling everyday
B.	people want to hold only. cash because there is too much of liquidity in the economy
C.	the rate of interest is so low that no one wants to hold interest bearing assets and people wants to hold cash
D.	there is an excess of foregin exchange reserves in the economy leading to excess of money supply
Answer» D. there is an excess of foregin exchange reserves in the economy leading to excess of money supply

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