In a liquidity trap, the magnitude of the interest elasticity of speculative demand for money is
In a liquidity trap, speculative demand for money is infinitely elastic with respect to the interest rate. Additional money can be absorbed into idle balances without…
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In a liquidity trap, the magnitude of the interest elasticity of speculative demand for money is
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Correct answer C
In a liquidity trap, speculative demand for money is infinitely elastic with respect to the interest rate. Additional money can be absorbed into idle balances without reducing the interest rate further.
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Karnataka SET (KSET)