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What is a Liquidity Trap?

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117

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Isaac Thuku

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Personal Question

Title

What is a Liquidity Trap?

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liquidity, interest rates, economy, entrepreneur, savings, debt, GDP, investment

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Member	Answer	Date
dotty	It is a point in the economy the interest rates cannot fall further and people prefer to hold their asset in liquid form thus no saving nor investment .At this point the monetary policy is ineffective this makes the GDP to stop growing thus recession leading debt through govt borrowing	2016-03-08