In the liquidity trap,the money demand curve
A)is horizontal.
B)is vertical.
C)is negatively sloped.
D)is positively sloped.

Name: In the liquidity trap,the money demand curve A)is horizontal. B)is vertical. C)is negatively sloped. D)is positively sloped.
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Question

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In a liquidity trap, the demand for money becomes perfectly elastic (horizontal) at a certain low interest rate, indicating that people are willing to hold unlimited amounts of cash because they do not expect any significant return from investments.

In the Liquidity Trap,the Money Demand Curve