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 69 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

mcarey591

  • Member
  • Posts: 365
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Did you know?

The senior population grows every year. Seniors older than 65 years of age now comprise more than 13% of the total population. However, women outlive men. In the 85-and-over age group, there are only 45 men to every 100 women.

Did you know?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

Did you know?

You should not take more than 1,000 mg of vitamin E per day. Doses above this amount increase the risk of bleeding problems that can lead to a stroke.

Did you know?

The strongest synthetic topical retinoid drug available, tazarotene, is used to treat sun-damaged skin, acne, and psoriasis.

Metabolic rates of animals that differ in size. Metabolic rates of animals that differ in size.
International Television Viewing Rates in Childhood In most developed countries, children watch TV International Television Viewing Rates in Childhood In most developed countries, children watch TV
Renzo Piano Building Workshop, Aerial view of Kansai International Airport, Osaka, Japan. Renzo Piano Building Workshop, Aerial view of Kansai International Airport, Osaka, Japan.
Japan’s Physical Geography Japan’s Physical Geography
Prices in Japan before and after Opening to Trade Prices in Japan before and after Opening to Trade
Rita borrows $4,500 from the bank at 9 percent annually compounded interest to be repaid in ... Rita borrows $4,500 from the bank at 9 percent annually compounded interest to be repaid in ...
Video: Introduction to Herpes

For a complete list of videos, visit our video library