Scan QR code or get instant email to install app
Question:
• Money neutrality states that money supply and/or the money growth rate will not affect the real interest rate, but will influence inflationary expectations.
• Quantitative easing is basically an expansionary open market operation conducted on a much larger scale in the hope of stimulating the economy.
• A liquidity trap is a situation where an interest rate cut (to counter deflation in the economy) fails to lower savings and stimulate consumption.
Comments