Calculate the rate of inflation in Japan from 2014 to the estimate in 2019.
With reference to Table 1.1 identify one piece of evidence that suggests that Japan has not been using an expansionary fiscal policy before 2019.
Explain why deflation, as experienced by Japan, discourages consumption spending.
Use a diagram to explain what you would expect to happen to the Yen : US dollar exchange rate if the Bank of Japan continued with low interest rates, ‘even as other central banks around the world begin raising rates’.
Discuss how continuing with an expansionary monetary policy is expected to boost inflation and consider whether it is likely to be successful.
Discuss whether increases in government spending can offset risks to Japan’s economy if a downturn in foreign economies occurs.