illustrate and explain the impacts of a central bank reduction of its bank rate when an economy has a'' liquidity trap'' demand for money supply
Answers
Answered by
4
Answer:
All else being equal, a larger money supply lowers market interest rates, making it less expensive for consumers to borrow. Conversely, smaller money supplies tend to raise market interest rates, making it pricier for consumers to take out a loan.
Explanation:
Similar questions