In the context of the Indian economy, ‘Liquidity Trap’ refers to a situation where:

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1. **Meaning:** A liquidity trap is when people keep cash even though rates are low.
2. **Interest rate:** When $i \approx 0$, the return on bonds and deposits is very small.
3. **Effect:** Extra money or lower rates do not increase spending because people hoard cash.
4. **Conclusion:** This fits option **(b)** which says people prefer to hold cash despite low interest rates.

FINAL_ANSWER: b

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