Which of the situations are symptomatic of ldquo liquidity trap rdquo in an economy 1 ...........

Economic Affairs Money Supply and Monetary Policy

Which of the situations are symptomatic of “liquidity trap” in an economy?

1. Economy is not progressing as prevailing interest rates are high.

2. Consumer spending is not stimulated

3. Monetary policy becomes ineffective

Which of the following is correct?

Only 1

2 and 3

1 and 2

All of above

1st statement is incorrect i.e. Economy is not progressing as prevailing interest rates are high

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