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Questions › CUET-PG › CUET-PG 2023 Shift 2 › Q99
4 marks, −1Macroeconomics › IS-LM model › Monetary policy and the liquidity trap in IS-LMModerateabout 1 min

CUET-PG 2023 Shift 2 Question 99: IS-LM model

Given below are two statements: Statement I: When the economy is in liquidity trap, the LM curve is vertical. Statement II: Monetary policy is ineffective when the economy is in liquidity trap. In the light of the above statements, choose the correct answer from the options given below:

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Answer and worked solution

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IS-LM model has come up 137 times in 7 exams since 2004.

What this question tests

This question is on Monetary policy and the liquidity trap in IS-LM, part of IS-LM model in Macroeconomics.

How money supply changes work, and the classical and liquidity-trap extremes.

TestStop has 18 past-paper questions on this subtopic.

Take this paper as a timed mockMore on Monetary policy and the liquidity trap in IS-LM

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