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(Q4) Liquidity trap and unconventional monetary policy [15 points] (a) [4 points] What is a liquidity trap? (b) [4 points] Explain why conventional monetary policy
(Q4) Liquidity trap and unconventional monetary policy [15 points] (a) [4 points] What is a liquidity trap? (b) [4 points] Explain why conventional monetary policy becomes totally ineffective in the presence of a liquidity trap? (c) [7 points] Propose one unconventional monetary-policy measure that can poten- tially work under a liquidity trap. Explain in what sense it is "unconventional" and why it may work
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