When interest rate is very low and LM curve becomes horizontal straight line, then this situation is known as :
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JNU SSS 2020 Question 15: IS-LM model
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.
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