This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: During the 1990s, Japan experienced periods of deflation and very low nominal interest rates, ... (Read 71 times)

TVarnum

  • Hero Member
  • *****
  • Posts: 548
on: Jun 29, 2018
During the 1990s, Japan experienced periods of deflation and very low nominal interest rates, approaching zero percent. Why would lenders of money agree to a nominal interest rate of almost zero?
 
  What will be an ideal response?

Question 2

What is the difference between aggregate expenditure and consumption spending?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

fatboyy09

  • Sr. Member
  • ****
  • Posts: 358
Reply #1 on: Jun 29, 2018
Answer to Question 1

With the deflation, the real interest rate exceeded the nominal interest rate. Lenders were making their decisions based on the higher real interest rate, not the very low nominal interest rate.

Answer to Question 2

Aggregate expenditure represents the total spending in the economy. Consumption spending is just one component of aggregate expenditure. The other components of aggregate expenditure are: planned investment, government purchases, and net exports.


TVarnum

  • Member
  • Posts: 548
Reply 2 on: Jun 29, 2018
:D TYSM

kswal303

  • Member
  • Posts: 316
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

Vampire bats have a natural anticoagulant in their saliva that permits continuous bleeding after they painlessly open a wound with their incisors. This capillary blood does not cause any significant blood loss to their victims.

Did you know?

Asthma attacks and symptoms usually get started by specific triggers (such as viruses, allergies, gases, and air particles). You should talk to your doctor about these triggers and find ways to avoid or get rid of them.

Did you know?

Multiple sclerosis is a condition wherein the body's nervous system is weakened by an autoimmune reaction that attacks the myelin sheaths of neurons.

Did you know?

The first successful kidney transplant was performed in 1954 and occurred in Boston. A kidney from an identical twin was transplanted into his dying brother's body and was not rejected because it did not appear foreign to his body.

Did you know?

Recent studies have shown that the number of medication errors increases in relation to the number of orders that are verified per pharmacist, per work shift.

Metabolic rates of animals that differ in size. Metabolic rates of animals that differ in size.
Political parties vs interest groups Political parties vs interest groups
Age-Specific Fertility Rates Age-Specific Fertility Rates
After 159 days,she paid a maturity value of $11,626, which included interest of $814. After 159 days,she paid a maturity value of $11,626, which included interest of $814.
Determine the nominal annual rate of interest of the following ordinary general annuity. Determine the nominal annual rate of interest of the following ordinary general annuity.
Demographic transition model for changes in population growth rates and sizes, correlated with long- Demographic transition model for changes in population growth rates and sizes, correlated with long-
Video: Bone Healing Animation

For a complete list of videos, visit our video library