A liquidity trap occurs when low / zero interest rates fail to stimulate consumer spending and monetary policy becomes ineffective. In this situation, an increase in the money supply could fail to increase spending because interest rates can't fall further.
steve williams answered the question on January 23, 2018 at 11:27
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Explain the phenomenon of liquidity trap
(Solved)
Explain the phenomenon of liquidity trap.
Date posted:
January 23, 2018
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Recognize the impact of monetary policy on aggregate demand
(Solved)
Recognize the impact of monetary policy on aggregate demand
Date posted:
January 23, 2018
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Answers (1)
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Justify expansionary and contractionary monetary policy.
(Solved)
Justify expansionary and contractionary monetary policy.
Date posted:
January 23, 2018
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Explain factors that prevent the money multiplier from working empirically as it does theoretically
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Explain factors that prevent the money multiplier from working empirically as it does theoretically
Date posted:
January 23, 2018
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Answers (1)
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Explain how the money multiplier works in theory
(Solved)
Explain how the money multiplier works in theory
Date posted:
January 23, 2018
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Use the concept of market equilibrium to explain changes in the interest rate and money supply
(Solved)
Use the concept of market equilibrium to explain changes in the interest rate and money supply
Date posted:
January 23, 2018
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Answers (1)
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Explain factors that cause shifts in the money demand curve
(Solved)
Explain factors that cause shifts in the money demand curve
Date posted:
January 23, 2018
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Answers (1)
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What are the factors that affects the demand of a product?
(Solved)
What are the factors that affects the demand of a product?
Date posted:
January 23, 2018
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Answers (1)
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What is money multiplier?
(Solved)
What is money multiplier?
Date posted:
January 23, 2018
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Answers (1)
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Factors to consider on making a decision on how to produce
(Solved)
Factors to consider on making a decision on how to produce.
Date posted:
January 22, 2018
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Answers (1)
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Analyze the key political and economic governance challenges in Africa
(Solved)
Analyze the key political and economic governance challenges in Africa.
Date posted:
January 20, 2018
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Answers (1)
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(a)Using well labelled diagrams,distinguish between demand and supply (b) state the law of demand and state exceptions to this law(c) Explain five constraints to...
(Solved)
(a)Using well labelled diagrams,distinguish between demand and supply (b) state the law of demand and state exceptions to this law
Date posted:
January 10, 2018
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Answers (1)
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Give reasons for the regulations in the transport industry
(Solved)
Give reasons for the regulations in the transport industry.
Date posted:
December 18, 2017
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Answers (1)
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Explain the nature of indifference curves for all goods
(Solved)
Explain the nature of indifference curves for all goods
Date posted:
December 17, 2017
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Answers (1)
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Discuss the decolonization process in Kenya
(Solved)
Discuss the decolonization process in Kenya.
Date posted:
December 14, 2017
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Answers (1)
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Human resource management is useless and shouldn't be taught to student at university. Discuss
(Solved)
Human resource management is useless and shouldn't be taught to student at university. Discuss.
Date posted:
December 7, 2017
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Answers (1)
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State and explain the economic ideas of Hebrews
(Solved)
State and explain the economic ideas of Hebrews.
Date posted:
December 6, 2017
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Using the mercantilism theory on protectionism explain how the kenyan government can protect its local industries
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Using the mercantilism theory on protectionism explain how the kenyan government can protect its local industries
Date posted:
December 6, 2017
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Answers (1)
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Describe the following types of economic markets using clear diagrams. (1) Perfect competition (2) Monopoly (3) Monopolistic competition
(Solved)
Describe the following types of economic markets using clear diagrams. (1) Perfect competition (2) Monopoly (3) Monopolistic competition
Date posted:
December 2, 2017
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According to peter Schumpeter creativity is a key to determining aspects of entrepreneurship, briefly explain the qualities of a creative person
(Solved)
According to peter Schumpeter creativity is a key to determining aspects of entrepreneurship, briefly explain the qualities of a creative person.
Date posted:
December 1, 2017
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Answers (1)