Q. The situation ‘Liquidity trap’ refers to

• (A) Because of price rate declination people wish to hold only cash
• (B) People want to hold only cash because there is too much of liquidity in the economy
• (C) The rate of interest is so low that no one wants to hold interest bearing assets and people wants to hold cash
• (D) There is an excess of foreign exchange reserves in the economy leading to excess of money supply