The Japanese economy has experienced deflation (falls in the price level) for a number of years. Given this, which of the following statements is TRUE. a. The transactions demand for money curve in Japan has shifted to the left so less money is demanded for a given level of interest rates. b. The transactions demand for money curve in Japan has shifted to the left as less money is demanded for a given level of prices. c. According to the central banks policy reaction function there should be a fall in real interest rates. d. Both a and c are correct. e. Both b and c are correct.
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