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Whether fiscal policy and conventional monetary policy

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Reference no: EM13693991

1. Show a liquidity trap equilibrium in an IS-LM diagram and an AS-AD diagram. Give an explanation for the slopes and positions of the curves in the diagram.

2. Explain whether fiscal policy and conventional monetary policy can solve the liquidity trap problem.

3. Explain why central banks have resorted to unconventional monetary policies. Describe them and explain why they may be effective in stimulating the economy.

Reference no: EM13693991

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