One of the possible solutions for the Japanese slump is to
A)implement macroeconomic policies to create inflation.
B)maintain a constant aggregate price level.
C)maintain the real interest rate at its original level.
D)none of the above

Question

Quizplus · Accepted Answer

Implementing macroeconomic policies that create inflation can help boost economic activity and increase spending, which can help mitigate the Japanese slump. Maintaining a constant aggregate price level or maintaining the real interest rate at its original level may not be enough to stimulate economic growth and may even have unintended consequences. Therefore, option A is the best choice.

One of the Possible Solutions for the Japanese Slump Is