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Chako Chako
wrote...
Posts: 2948
8 years ago
When an economy is in a liquidity trap
A) monetary policy cannot be used to influence the exchange rate.
B) there is an excess demand for bonds.
C) it can escape only by introducing a hard, or illiquid, currency.
D) monetary policy can be used to drive interest rates down, but not to drive them up.
E) people and institutions avoid holding cash balances.
Textbook 
International Economics: Theory and Policy

International Economics: Theory and Policy


Edition: 10th
Author:
Read 94 times
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wrote...
8 years ago
A
Chako Author
wrote...
8 years ago
Correct!
wrote...
8 years ago
Don't forget to vote my answer as best Nerd Face
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