Suppose the economy is in a liquidity trap. True or false. A monetary contraction will not have any effect on the nominal intere

Question

3 years ago

10

st rate, though a monetary expansion may have an effect on the nominal interest rate.

1 answer:

swat32 · Answer 1 · 2022-05-05T06:57:00+03:00

swat323 years ago

8 0

Answer:

False

Explanation:

When a country is in a liquidity trap , monetary policy both contractionary and expansionary would have an effect on interest rate