Consider the following statements, with reference to the liquidity trap:
1. It is a situation in which the general public is prepared to hold on to whatever amount of money is supplied, at a given rate of interest.
2. In this situation the interest rate gets increases manifold.
3. Open Market Operation helps in overcoming this situation.
Which of the above statement is/are correct?
1
1 only
2
2 and 3 only
3
3 only
4
1, 2, and 3