If a liquidity trap does exist then policy will not be effective in increasing

If a liquidity trap does exist then policy will not

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90.If a liquidity trap does exist, then ______ policy will not be effective in increasing income when interest rates reach very ______ levels.A)monetary; highB)monetary; lowC)fiscal; highD)fiscal; low91.If expected inflation equals 3 percent and monetary policymakers push the nominal Page 20
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interest rate to 1 percent, the real interest rate equals ______ percent.92.According to the ISLMmodel, when the government increases taxes and government purchases by equal amounts:93.If the government wants to raise investment but keep output constant, it should:94.A tax cut combined with tight money, as was the case both in the United Kingdom and the United States in the early 1980s, should lead to a:A)rise in the real interest rate and a fall in investment.B)fall in the real interest rate and a rise in investment.C)rise in both the real interest rate and investment.D)fall in both the real interest rate and investment.95.An increase in the money supply:96.An increase in government spending raises income:Page 21
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97.An increase in taxes lowers income:
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