Which policy (monetary or fiscal) is more effective in fighting the demand crisis under free-floating exchange regime.

32. How one can boost the economy (using monetary or fiscal policy) under a fixed exchange rate.

33. Describe what we can exactly understand under the term liquidity trap? What is the possible reason for the liquidity trap to appear? Which policy is more effective in the  case of a liquidity trap and which is ineffective?

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Under a freefloating exchange rate regime monetary policy is generally more effective in fighting th... View the full answer