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AP Macroeconomics
Unit 4 – Financial Sector
Topic 4.5
In the context of the money market, what is a liquidity trap?
A situation where banks refuse to lend money
A sudden shortage of liquid assets in the market
A situation where a country's currency loses value rapidly
A situation where increases in the money supply do not lower interest rates
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AP Macroeconomics - 4.5 The Money Market
Key terms
Money Market
Liquidity Trap
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About Fiveable
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CCPA Privacy Policy
Resources
Cram Mode
AP Score Calculators
Study Guides
Practice Quizzes
Glossary
Crisis Text Line
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© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.
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