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Smart Reasoning:

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Qaagi - Book of Why

Causes

Effects

to find economic and political solutionsto preventeconomies to get in a liquidity trap

This would helppreventthe economy falling into a liquidity trap

Deflationcreatesa liquidity trap in the economy

asset purchasesdesignedto drive the economy out of liquidity trap

the case ... deflationary expectationleadsthe economy to a liquidity trap

a credit crisiscan leadthe economy into a " liquidity trap

the deflationary expectationscan leadan economy into a liquidity trap

its attemptsto preventthe economy from going to a liquidity trap

the dangerleadsthe economy into a liquidity trap

Keynes ’ logicwas ... designedfor an economy in a liquidity trap

to deflation , which increases the value of cash , which leads to more savingleadsto deflation , which increases the value of cash , which leads to more saving

them to hold on to their cash and not lend it away in fear of defaultscausesthem to hold on to their cash and not lend it away in fear of defaults

completely horizontal LM curve(passive) caused bycompletely horizontal LM curve

the actions of the Fed from working through the banking systempreventsthe actions of the Fed from working through the banking system

the mid- to long - term sustainability of Japansinfluencethe mid- to long - term sustainability of Japans

a situation where the increased money supply within the economy does not stimulate a reduction in interest ratescreatesa situation where the increased money supply within the economy does not stimulate a reduction in interest rates

To OpportunityLeadsTo Opportunity

the stage for a currency trapsetsthe stage for a currency trap

the rate of interest from falling below a certain minimum levelmay preventthe rate of interest from falling below a certain minimum level

once nominal interest rates became low enoughcreatedonce nominal interest rates became low enough

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