The concept of 'Liquidity Trap' implies that monetary policy becomes ineffective because:
A. People prefer to hold cash at very low interest rates
B. Money demand is interest-inelastic
C. Investment is highly interest-elastic
D. Interest rates are very high
Answer: Option A
Solution (By JKSSB Mock Tests)
In a liquidity trap, interest rates are near zero and the demand for money becomes perfectly elastic; additional money supply is absorbed as idle balances without reducing interest rates further.
Explanation:
MFN principle under WTO requires that any advantage granted to one member country must be extended to all other members, ensuring non-discrimination.
Explanation:
Interoperability is the capacity of different digital systems or platforms to communicate, exchange data and use the exchanged information, which can reduce switching costs and increase contestability.
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