Recent Japanese experience has been characterized by tight monetary policy,as indicated by
A) falling interest rates.
B) short-term interest rates near zero.
C) falling asset prices.
D) low real interest rates.

Question

Quizplus · Accepted Answer

Tight monetary policy has led to falling asset prices in Japan. This has been a result of the Bank of Japan's efforts to maintain low inflation by keeping interest rates low, which has made borrowing and spending more expensive. As a result, investors have pulled their money out of the stock market and other asset classes, causing prices to fall. Falling asset prices can also have a negative impact on consumer confidence and spending, further slowing economic growth.

Recent Japanese Experience Has Been Characterized by Tight Monetary Policy,as