RESEARCH PROJECT. A liquidity trap is a situation where a portion of the money demand curve becomes horizontal; people are willing to hold unlimited amounts of money at some low interest rate. Some say this situation occurred from December 16, 2008 until December 17, 2015 because the federal funds rate target hit its lower bound. What was that target range? See https://www.federalreserve.gov/monetarypolicy/openmarket.htm For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)