Interest Rate 8 0000 O 2 16 11 1 11 20 1 Money Money Money Supply 1 Supply2 Supply3 15 1 1 T 11 12 Li Money Demand B C Quantity of Money (billions of doilars) Figure 15.5 The liquidity trap illustrated in Figure 15.5 is the result of a Currency that is not serving its function as a store of value. Fed ceiling on interest rates. Low opportunity cost of money. Low demand for cash at low interest rates.

Figure 15.5 The liquidity trap illustrated in Figure 15.5 is the result of a Currency that is not serving its function as a store of value. Fed ceiling on interest rates. Low opportunity cost of money. Low demand for cash at low interest rates