When Savings continue to grow while interest rates decline is referred to as
A) The liquidity trap
B) An inverse yield curve
C) Negative yield
D) None of the above
E) All of the above

Question

Quizplus · Accepted Answer

The liquidity trap is a situation where monetary policy becomes ineffective because people hoard cash instead of spending or investing, often occurring when interest rates are low and savings rates are high.

When Savings Continue to Grow While Interest Rates Decline Is