When the speculative demand for money becomes perfectly elastic with respect to the interest rate, making the speculative money demand curve…
CA Foundation · Business Economics · PYQS · September 2025
When the speculative demand for money becomes perfectly elastic with respect to the interest rate, making the speculative money demand curve parallel to the X-axis, this situation is called a/an _________
Suggested Answer and Working Notes:
Correct Answer: Option (B)
B. Liquidity trap
Topics: Money Market