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    Economic Principles
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    Exam 28: Fiscal Policy and the Business Cycle
  5. Question
    During a Liquidity Trap
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During a Liquidity Trap

Question 8

Question 8

Multiple Choice

During a liquidity trap:


A) monetary and fiscal policies are equally effective.
B) changes in taxes do not impact aggregate demand.
C) changes in government spending do not impact aggregate demand.
D) monetary policy is less effective.

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