In a liquidity trap, monetary policy becomes ineffective.
В ловушке ликвидности денежно-кредитная политика становится неэффективной.
Definitions
A liquidity trap is an economic situation in which interest rates are low and savings rates are high, rendering monetary policy ineffective. In this scenario, individuals prefer to hold onto cash rather than invest or spend, leading to stagnant economic growth despite the central bank's efforts to stimulate the economy through lower interest rates.
