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The '''liquidity trap''' is an economic theory that there is low interest rate at which increasing the money supply further will not lower the interest rate further.  This occurs, according to the theory, because there is infinite demand for money at the low interest rate and everyone would rather hold money in idle balances rather than move into positions holding long-term securities at very low yields.

The '''liquidity trap''' is an [[Economics|economic]] theory that there is low interest rate at which increasing the money supply further will not lower the interest rate further.  This occurs, according to the theory, because there is infinite demand for money at the low interest rate and everyone would rather hold money in idle balances rather than move into positions holding long-term securities at very low yields.

[[Category: Economics]]

[[Category: Economics]]