In Keynes' concept of the liquidity trap,
A) monetary policy becomes more effective as interest rates fall below normal.
B) people wish to hold more bonds as interest rates fall below normal.
C) people wish to hold fewer bonds as interest rates fall below normal.
D) there is a need for more liquidity in the banking system.
C
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A commercial bank is defined as
A) any institution that accepts deposits. B) a firm that is chartered to accept deposits and make loans. C) the institution that sets regulations for commercial activities. D) a firm that obtains funds by selling shares and then buys U.S. Treasury bills. E) any institution that makes loans.
Assuming that soybeans and tobacco can both be grown on the same land, a decrease in the price of tobacco, other things being equal, causes a(n):
a. rightward shift of the supply curve for tobacco. b. upward movement along the supply curve for soybeans. c. rightward shift in the supply curve for soybeans. d. leftward shift in the supply curve for soybeans.
Refer to the accompanying figure. An increase in supply is represented by a shift from:
A. curve B to curve A. B. curve C to curve D. C. curve C to curve B. D. curve A to curve B.
Income tax collections:
A. rise during a recession, thus reduce the severity of the recession. B. rise during a recession, thus increase the severity of the recession. C. fall during inflationary episodes, thus increase the severity of the inflation. D. fall during a recession, thus reducing the severity of the recession.