Abenomics: In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy . The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics. Appreciation of Currency: It is referred as the rise in the value of a currency in comparison to other currencies. Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR. Depreciation of Currency: It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR. To explain: Reason for Abenomics resulting in a weaker yen.

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Answer 1

Question

Chapter 18, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.

Depreciation made theexport relatively cheaper and the import relatively more expensive.

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Short Description Fiscal Policy Graph Details Shown is a Fiscal Policy diagram with the variable Real GDP (billions of dollars) on the x-axis and the variable Price Level on the y-axis. The x-axis is scaled from 0 to 800 billion dollars with an increment of 40 billion dollars, and the y-axis is scaled from 30 to 150 units with an increment of 5 units. Object Details On the graph we have:Four Line Objects:An upward sloping Aggregate Supply, AS line with two endpoints:Point 1 at (160, 70)Point 2 at (720, 140)A downward sloping Aggregate Demand, AD1 line with two endpoints:Point 1 at (80, 110)Point 2 at (640, 40)A vertical Long-run Aggregate Supply, LRAS with two endpoints:Point 1 at (400, 145)Point 2 at (400, 30)A downward sloping Aggregate Demand, AD line with two endpoints:Point 1 at (720, 60)Point 2 at (160, 130)Two Reference Points:Lines AS, AD, and LRAS intersect at (400, 100)Lines AS and AD1 intersect at (280, 85) a. How much does aggregate demand need to change to restore the…

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Answer 2

Question

Chapter 18, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.

Depreciation made theexport relatively cheaper and the import relatively more expensive.

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Answer 3

Question

Chapter 18, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.

Depreciation made theexport relatively cheaper and the import relatively more expensive.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 18, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.

Depreciation made theexport relatively cheaper and the import relatively more expensive.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 18, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.

Depreciation made theexport relatively cheaper and the import relatively more expensive.

Answer 6

Chapter 18, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.

Depreciation made theexport relatively cheaper and the import relatively more expensive.

Answer 7

Chapter 18, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Answer 8

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.