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WILL POWER REPORT: THE LIQUIDITY TRAP


 
Nothing but the truth!
 
By Will Power
 
August  19, 2011 (San Diego)--Here's the definition: The liquidity trap, in Keynesian economics, is a situation where monetary policy is unable to stimulate an economy, either through lowering interest rates or increasing the money supply. Liquidity traps typically occur when expectations of adverse events (e.g., deflation, insufficient aggregate demand, or civil or international war) make persons with liquid assets unwilling to invest.
 

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