Question : Which of the following statements is/are correct regarding the liquidity trap?
i. It is where speculative demand for money is infinitely inelastic and the liquidity preference curve becomes perfectly elastic. ii. It is where speculative demand for money is infinitely elastic and the liquidity preference curve becomes perfectly inelastic. iii. It is the point where speculative demand for money is infinitely elastic and the liquidity preference curve becomes perfectly elastic. iv. It is the point where speculative demand for money and the liquidity preference curves are not related.
Option 1: Only Statement ii is correct
Option 2: Only Statement iii is correct
Option 3: Only Statement iv is correct
Option 4: Only Statements i and ii are correct
New: SSC CHSL Tier 2 answer key released | SSC CHSL 2024 Notification PDF
Recommended: How to crack SSC CHSL | SSC CHSL exam guide
Don't Miss: Month-wise Current Affairs | Upcoming government exams
New: Unlock 10% OFF on PTE Academic. Use Code: 'C360SPL10'
Correct Answer: Only Statement iii is correct
Solution : The correct option is Only statement iii is correct .
The liquidity preference curve is completely inelastic in a liquidity trap because people are unwilling to invest or spend their money and have a strong desire to cling to it, making the speculative demand for money excessively elastic. This is usually the case when traditional monetary policy tools become ineffective, and nominal interest rates are at or close to zero.
Candidates can download this e-book to give a boost to thier preparation.
Result | Eligibility | Application | Admit Card | Answer Key | Preparation Tips | Cutoff
Question : Which of the following statements is/are correct about speculative demand for money?
i. It is a Perfectly interesting elastic. ii. It is Relatively interest-elastic. iii. It is Perfectly interest inelastic. iv. It is Relatively interest inelastic.
Question : Which of the following statements is/are correct concerning the demand for money? i. When the interest rate is high, the demand for money is low. ii. When the interest rate is low, demand for money is also low. iii. When the interest rate is high, demand for
Question : The demand curve facing a perfectly competitive firm:
Question : If the price elasticity of demand is less than one, then the demand for the goods is said to be ______.
Question : Directions: Arrange the given words in the sequence in which they occur in the dictionary. i. Treasure ii. Treadmill iii. Training iv. Translate
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile