During a liquidity trap:
A) monetary policy is ineffective,since nominal interest rates cannot fall below zero.
B) the money market is in disequilibrium.
C) the only tool that the Bank of Canada finds effective is expansionary monetary policy.
D) nominal interest rates will rise regardless of what policy the Bank of Canada pursues.
Correct Answer:
Verified
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A) entails eliminating inflation in an economy.
B)
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A)aggregate demand
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A)the unemployment rate is
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