How does the presence of a liquidity trap affect the effectiveness of expansionary monetary policy in reducing unemployment during an economic recession?

When a liquidity trap exists, interest rates are already at or near zero, so printing more money does not lower borrowing costs any further. Because the cost of borrowing cannot be reduced, businesses and consumers do not increase spending even though the central bank injects liquidity, so the expected boost in investment and consumption is weak. Consequently, the usual mechanism of expansionary policy—stimulating demand and lowering unemployment—fails to work. For example, if the economy is in recession and the bank raises the money supply, but rates stay at 0 %, firms still see little incentive to borrow and hire, keeping unemployment high. Thus, in a liquidity trap, monetary stimulus is largely ineffective at reducing unemployment.