During Japan’s economic slump in the early 1990s, monetary policy: a.

During Japan’s economic slump in the early 1990s, monetary policy:

a. was highly effective at stimulating income.
b. was caught in a liquidity trap as a result of high inflation and interest rates.
c. was ineffective because of a liquidity trap caused by near zero interest rates.
d. was never even attempted.
e. was the cause of the slump.

ANSWER

C