Assertion (A) : In liquidity trap, the demand for money is perfectly interest elastic. Reason (R) : Because in this situation, all the investors expect the market rate of interest to rise towards the natural rate of interest. Codes :
A) (a) & (r) both are correct and (r) is the correct explanation of (a)
B) (a) & (r) both are correct, but (r) is not the correct explanation of (a)
C) (a) is correct, but (r) is incorrect.
D) both (a) and (r) are incorrect.
Correct Answer:
Verified
Q4: In which of the following market Pigou
Q5: Real balance effect is equal to -
A)pigou
Q6: Under perfect competition firm hire labour until-
A)money
Q7: Classical dichotomy is based on -
A)neutrality of
Q8: Cambridge K is related to -
A)restatement theory
Q10: Which of the following is not specifically
Q11: In the Keynesian system speculative demand for
Q12: The classical economists focused on the role
Q13: Identify the correct chronological order of the
Q14: Liquidity trap is a situation when,
A)all potential
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