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What is a liquidity trap?
A liquidity trap is an economic situation in which interest rates are low, and savings rates are high, rendering monetary policy ineffective in stimulating the economy. In this scenario, consumers and businesses hoard cash instead of spending or investing, despite central banks injecting liquidity into the financial system. As a result, even with low borrowing costs, aggregate demand remains stagnant, leading to persistent economic downturns. Liquidity traps often occur during periods of recession or deflation.
What is usually the largest single account in the overall balance of payments?
The largest single account in the overall balance of payments is, for most countries, the current account.
Meaning of liquidity in relation to economy crises presently?
Liquidity refers to the availability of cash for the industries & the general public for their day to day financial needs. Liquidity in this economic crisis situation is very tight and people are finding it difficult to raise cash for their requirements.
Explain the role played by imf in solving international liquidity crisis?
liquidity problem has two aspects qualitative aspects and quantitave aspects the proble,m
Understanding the definition of liquidity is useful in learning about monetary policy?
I person must be able to understand the definition of liquidity in order to learn about monetary policy. true
Which type of account typically has low liquidity?
A certificate of deposit (CD) typically has low liquidity. This is because funds deposited in a CD are tied up for a fixed term, and withdrawing them before maturity usually incurs penalties. As a result, access to cash is limited during the term of the investment, making it less liquid compared to savings or checking accounts.
You can access your funds easier if your account has what liquidity?
You can access your funds easier if your account has high liquidity. High liquidity means that the assets can be quickly converted into cash without significantly affecting their price. This allows for swift transactions and immediate access to funds when needed, making it easier to manage financial needs. Conversely, low liquidity can result in delays and potential losses when trying to access funds.
What is an account with moderate interest and some liquidity?
Im not supposed to answer it the internet is!
Which of these options for saving money offers the most liquidity?
Piggy Bank
What is liquidity management?
Managing the flow of (usually other people's) money
What do savings account usually offer a high or low interest rate?
As low an interest as the borrower can get away with and still attract investment.
What is CLR in banking system?
cash liquidity ratio which a bank has to maintain in RBI account all the time
How does the order of liquidity apply to the balance sheet?
The order of liquidity is applied in the balance sheet as a presentation of assets. It is in the order of the amount of time it would usually take to convert them into cash.
Which of the these options for saving money typically offers the most liquidity?
basic savings account
Which option for saving money typically offers the least liquidity?
Basic savings account
What is liquidity of a savings account?
Liquidity is a term used to signify how easily an asset or an investment can be converted into cash. Obviously cash is the most liquid investment or asset. Real Estate could be the least liquid because finding a prospective buyer for a home will take a long time. The money in a Savings account is extremely liquid. The account holder can withdraw his money anytime he wants.
What is the measure of how quickly an asset can be converted to cash?
Liquidity is the measure of how quickly an asset can be converted to cash. High liquidity means an asset can be quickly converted to cash with minimal price impact, while low liquidity implies it may take longer to convert the asset to cash and may require a discount in price to do so.
