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Suppose the money market is in the liquidity trap and the Fed increases the supply of money. Individuals would rather hold __________ than __________ because they expect that bond prices can go no __________.

Respuesta :

Answer:Money;bond;higher

Explanation:A liquidity trap refers to an economical situation in which interest rates are low and so are the savings rates. In a liquidity trap, consumers intetionally shy away from bonds because they believe in this case it is likely that the interest rate may soon increase which will pull down bond prices.

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