The reduction in Japanese stock prices in the 1990s was most likely the result of which of the following?
A)contractionary monetary policy
B)contractionary fiscal policy
C)the end of a speculative bubble
D)an increase in inflation

Question

Quizplus · Accepted Answer

The reduction in Japanese stock prices in the 1990s was largely due to the end of a speculative bubble in the Japanese economy. In the 1980s, Japanese real estate and stock prices experienced a significant surge due to speculative investments, but by the early 1990s, these prices began to drop rapidly. This resulted in a significant decline in stock prices and a period of economic stagnation known as the "Lost Decade." Neither contractionary monetary nor fiscal policy nor an increase in inflation was significant factors in this situation.

The Reduction in Japanese Stock Prices in the 1990s Was