Definition: Liquidity trap is a situation when expansionary monetary policy ( increase in money Depression is defined as a severe and prolonged recession .
Low interest rates alone do not define a liquidity trap. For the situation to qualify, there has to be a lack of bondholders wishing to keep their.
In this article we will discuss about the concept of liquidity trap, explained with the help of a suitable diagram. Liquidity trap refers to a situation in which an.
Liquidity trap refers to a state in which the nominal interest rate is close or such a situation, because the opportunity cost of holding money is zero, even if the.
A liquidity trap is a situation, described in Keynesian economics, in which, "after the rate of A liquidity trap may be defined as a situation in which conventional monetary policies have become impotent, because nominal interest rates are at or.
(c) The liquidity trap refers to a situation whereby the interest rate is so low that no one wants to hold bonds, and individuals only want to hold cash. This is.
The liquidity trap refers to a situation in which a.) the nominal interest rate is practically zero b.) the inflation rate is extremely high c.) the spread in yields.
Put simply: the term ”liquidity trap” refers to a situation in which nominal interest rates are so low that stimulating the economy through monetary.