Answer:
b) Keynesian transmission mechanism when there is a liquidity trap.
Explanation:
Since the interest rate is so low, the public will have no incentive to deposit their cash into a bank or invest it in a company. This is a situation where the public will hold to their cash becasue they feel that a negative interest rate is possible. This type of situation could occur if the real interest rate is 0 and the public believes that the possibility of deflation exists and they will be better of by holding to their money.
