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    Principles of Economics Study Set 12
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    Exam 27: Monetary Policy
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    A Liquidity Trap Is a Situation in Which Further Increases
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A Liquidity Trap Is a Situation in Which Further Increases

Question 84

Question 84

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A liquidity trap is a situation in which further increases in the money supply result in smaller reductions in the interest rate until the interest rate approaches zero.

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