'Liquidity trap' is a situation in whichoptions1.people want to hold only cash because prices are falling everyday.2.people want to hold only cash because there is too much of liquidity in the economy.3.the rate of interest is so low that no one wants to hold interest bearing assets and people want to hold cash.4.there is an excess of foreign exchange reserves in the economy leading to excess of money supply.
'Liquidity trap' is a situation in which
options
1.people want to hold only cash because prices are falling everyday.
2.people want to hold only cash because there is too much of liquidity in the economy.
3.the rate of interest is so low that no one wants to hold interest bearing assets and people want to hold cash.
4.there is an excess of foreign exchange reserves in the economy leading to excess of money supply.