The following data describe market conditions: (a) At what rate of interest does the liquidity trap emerge?
Question:
(a) At what rate of interest does the liquidity trap emerge?
(b) At what rate of interest does investment demand become totally inelastic?
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Money supply (in billions) $100 S200 | $300 $400 $ 600 $ 500 $ 700 8.0 7.5 7.0 6.5 6.0 5.5 5.5 Interest rate Rate of investment (in billions) $ 12 S 12 $ 15 $ 16 S16.5 S16.5 S16.5
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Related Book For
The Macro Economy Today
ISBN: 978-1259291821
14th edition
Authors: Bradley R. Schiller, Karen Gebhardt
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