An economy in a liquidity trap faces a zero lower bound on short-term interest rates. Some believe that expansionary monetary policy would be ineffective in this situation. Others argue that there are alternative transmission mechanisms that allow policy to have some impact. Briefly describe at least four alternative transmission mechanisms for monetary policy.

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The Answer of An economy in a liquidity trap faces a zero lower bound on short-term interest rates. Some believe that expansionary monetary policy would be ineffective in this situation. Others argue that there are alternative transmission mechanisms that allow policy to have some impact. Briefly describe at least four alternative transmission mechanisms for monetary policy.

An Economy in a Liquidity Trap Faces a Zero Lower