Why does the liquidity trap exist? According to Keynes it is because _______ a. At extremely high interest?
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Suppose the banking system does NOT hold excess reserves and the reserve ratio is 25%. ... . (Figure: Classical Versus Keynesian Macroeconomics) According to the ... C) has little impact on aggregate demand due to the existence of liquiditytraps. ... the demand for loanable funds is ______ and interest rates are ______. |