A-LevelEconomicsMoney & BankingOct/Nov 2018Paper 3 Q261 Mark
The diagram shows that the elasticity of demand for money becomes infinite at a certain rate of interest. [Figure 26.1] Which statement explains this situation? A At low interest rates there is an infinite demand for bonds. B Other assets are close substitutes for money. C Some money is required for transactions balances. D There is a liquidity trap.
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