The primary indicator of a liquidity trap is persistently low-interest rate levels mandated by the central bank of a country for a prolonged period. Though the primary aim of such government policies is to ensure robust economic activity, a liquidity trap can soon develop if not monitored closely. (Groww)

As traditional monetary policy is ineffective when there is a liquidity trap in the economy, governments look towards more unconventional methods to bring the economy out of the trap. One of the more effective remedies is quantitative easing. It is where central banks buy financial assets from commercial banks and other institutions, which raises prices for those assets, lowers yields, and increases liquidity in the economy. (Corporate Finance Institute)

In a liquidity trap, lenders find it hard to attract qualified borrowers. With interest rates nearing zero, there is little elbow room for additional incentives to attract highly-qualified candidates. (Market Business News)