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wlad13 [49]
3 years ago
14

The liquidity trap refers to the

Business
1 answer:
kipiarov [429]3 years ago
7 0

Answer:

The answer is d. possibility that interest rates drop so low that people willingly hold all the additions to the money supply, rather than use it to buy bonds

Explanation:

A liquidity trap is a situation in which interest rates are low and savings rates are high. It occurs when  monetary policy becomes ineffective because, despite zero/very low-interest rates, people want to hold cash rather than spend or buy illiquid assets

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