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According to an article in the Economist magazine, in 2013 the Japanese economy was experiencing falling prices "on everything from chocolate bars to salad."
a. What is the term for a falling price level?
b. The article also stated that Japanese Prime Minister Shinzo Abe was pressuring the Bank of Japan, the Japanese central bank, to take steps to hit an inflation target of 2 percent. Why would the Japanese government consider a falling price level to be undesirable? What steps could the Bank of Japan take to increase the price level?
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Which of the following items would not be included in GDP for the current year?
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