Which of the following statements is correct? Other things equal:?

Question

A. a decline in real output will shift both the transactions demand curve for money and the total money demand curve to the right.

B. a decline in the interest rate will shift the asset demand curve for money to the right, but leave the total money demand curve unchanged.

C. deflation will shift both the transactions demand curve for money and the total money demand curve to the left.

D. inflation will shift the transactions demand curve for money to the right, but leave the total money demand curve unchanged.

Answer 1

C. deflation will shift both the transactions demand curve for money and the total money demand curve to the left.

It's question 17 in this test (answer key is at lats page):

http://www.udel.edu/Economics/ndas/sol_m...

Answer 2

D