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Economics (AS & A Level) · May / June 2024 · Paper 32 · Question 21

9708Money and banking

Which row correctly identifies the characteristics of an economy experiencing the liquidity trap?

  1. Ahigh economic growth, high inflation, low interest rate
  2. Blow economic growth, high inflation, low interest rate
  3. Clow economic growth, low inflation, low interest rate
  4. Dlow economic growth, low inflation, high interest rate

As printed in the paper

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Correct answer: C. low economic growth, low inflation, low interest rate

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