What is the liquidity trap and why is it so dangerous how, Ask an Expert

Economics

What is the liquidity trap and why is it so dangerous? How does expected deflation set a floor on the real interest rate that the Fed can set? Why is fiscal policy crucial in a liquidity trap? What is meant by a deflationary spiral. Be able to use the AE-PC model to describe the effects of a liquidity trap.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92203549

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