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Suppose the Money Market Is in the Liquidity Trap and the Fed

Question 70

Multiple Choice

Suppose the money market is in the liquidity trap and the Fed increases the supply of money.Individuals would rather hold __________ than __________ because they expect that bond prices can go no __________.


A) bonds; money; higher
B) bonds; money; lower
C) money; bonds; higher
D) money; bonds; lower

Correct Answer:

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