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 68 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
Excellent

kilada

  • Member
  • Posts: 311
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

In 1864, the first barbiturate (barbituric acid) was synthesized.

Did you know?

Nearly all drugs pass into human breast milk. How often a drug is taken influences the amount of drug that will pass into the milk. Medications taken 30 to 60 minutes before breastfeeding are likely to be at peak blood levels when the baby is nursing.

Did you know?

Looking at the sun may not only cause headache and distort your vision temporarily, but it can also cause permanent eye damage. Any exposure to sunlight adds to the cumulative effects of ultraviolet (UV) radiation on your eyes. UV exposure has been linked to eye disorders such as macular degeneration, solar retinitis, and corneal dystrophies.

Did you know?

Cancer has been around as long as humankind, but only in the second half of the twentieth century did the number of cancer cases explode.

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

Periods of Purple Crying Periods of Purple Crying
Cultural Variations in the Strange Situation Across cultures, most toddlers exhibit secure attachme Cultural Variations in the Strange Situation Across cultures, most toddlers exhibit secure attachme
Japan’s Physical Geography Japan’s Physical Geography
Japan’s Urban Landscape Japan’s Urban Landscape
Analysis of intial rates Analysis of intial rates
How to calculate simple interest (Part 4; P = I/rt) How to calculate simple interest (Part 4; P = I/rt)
Video: Carpal Tunnel Syndrome

For a complete list of videos, visit our video library