What does it imply about effectiveness of monetary policy

Reference no: EM131530766

Question: Since the crash of its stock market in 1989, the Japanese economy has seen little economic growth and some deflation. The accompanying table from the Organization for Economic Cooperation and Development (OECD) shows some key macroeconomic data for Japan for 1991 (a "normal" year) and 1995-2003.

a. From the data, determine the type of policies Japan's policy makers undertook at that time to promote growth.

b. We can safely consider a short-term interest rate that is less than 0.1% to effectively be a 0% interest rate. What is this situation called? What does it imply about the effectiveness of monetary policy? Of fiscal policy?

Reference no: EM131530766

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