Japan Appeared to Have Entered a Liquidity Trap at the Turn

Multiple Choice

Japan appeared to have entered a liquidity trap at the turn of the century because

A) inflation made currency holdings virtually worthless
B) the central bank pushed nominal interest rates so high than investment stagnated
C) consumer spending rose dramatically, depleting savings
D) deflation pushed real interest rates up to levels that the central bank could not correct
E) long-term investments depleted the economy of cash