R

Rakesh Yadav • 4.99K Points
Extraordinary Economic 

Q. The situation ‘Liquidity trap’ refers to

  • (A) Because of price rate declination people wish to hold only cash
  • (B) People want to hold only cash because there is too much of liquidity in the economy
  • (C) The rate of interest is so low that no one wants to hold interest bearing assets and people wants to hold cash
  • (D) There is an excess of foreign exchange reserves in the economy leading to excess of money supply
  • Correct Answer - Option(C)
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  • Filed under category Economic

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