Multiple Choice
The liquidity trap exists when
A) the IS-curve is vertical
B) the LM-curve is vertical
C) the LM-curve is horizontal
D) an increase in government spending is always fully crowded out
E) money demand is completely insensitive to changes in the interest rate
Correct Answer:
Verified
Correct Answer:
Verified
Q13: An interesting aspect of the recession of
Q14: The transmission mechanism<br>A)is the process by which
Q15: Expansionary fiscal policy can be successful without
Q16: Crowding out<br>A)does not occur in the liquidity
Q17: Which of the following describes a part
Q19: The view that "only money matters" is
Q20: When bankers talk about "one basis point,"
Q21: One side effect of expansionary fiscal policy
Q22: When the LM-curve is vertical,<br>A)the monetary policy
Q23: The term "quantitative easing" refers to a