Japan's very low market interest rates in the early 2000s reflected

Question

Quizplus · Accepted Answer

Very low market interest rates are a characteristic of deflationary economies. It is an indication that investors and consumers believe that the prices of goods and services will fall in the future. People tend to save more and spend less under such conditions, and this drives down interest rates. Therefore, the very low market interest rates in Japan's economy in the early 2000s could be attributed to the expectation of deflation.

Japan's Very Low Market Interest Rates in the Early 2000s