The liquidity trap refers to the situation where: Question 17 options: 1) the Fed adds excess reserves to the banking system, but it has minimal positive effect on lending, investment, or aggregate demand. 2) excessive consumer debt limits the growth in consumer spending necessary to bring the economy out of recession. 3) the public debt is so large that federal borrowing drives up interest rates and discourages private sector spending. 4) a financial crisis causes a run on banks and the elimination of billions in excess reserves.

Which of the following describes one of the ways that the demographics of an area affect the price of housing in that area? a. when more people have children, their incomes tend to be higher and the housing prices are also higher. b. older people are more likely to stay in their houses, creating a seller's market that keeps prices low. c. an area with a lower population density won't have enough construction workers to build new houses quickly. d. an area with younger people will have a higher demand for rentals and a lower demand for buying.