Author Question: In a liquidity trap situation: a. The Fed could not appreciably lower short term interest rates. b. ... (Read 201 times)

Awilson837 · **on:** Jun 30, 2018

In a liquidity trap situation:
a. The Fed could not appreciably lower short term interest rates.
b. If the Fed added reserves to the banking system, it would have little effect on investment.
c. Traditional monetary policy would be relatively weak in its effects on aggregate demand.
d. All of the above are true.

Question 2

U.S. labor productivity had slowed down in the 1970s and 1980s, but recent data shows that labor productivity has once again increased in the country.
a. True
b. False
Indicate whether the statement is true or false