Economics · Macroeconomics
In macroeconomic theory, a liquidity trap is said to occur when the demand for money becomes:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Directly proportional to the interest rate
- 2Unitary elastic with respect to the interest rate
- 3Perfectly inelastic with respect to the interest rate
- 4Perfectly elastic with respect to the interest rate✓
Correct answer
Perfectly elastic with respect to the interest rate
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