Sunday, November 20, 2011

Japan Central Bank Keeps Interest Rate Near Zero

A country's gross domestic is made up of private consumption + gross investment + government spending + (exports − imports) in the expenditure method. To stimulate economy, a country could use monetary policy by lowering interest rate to encourage investors to invest.

"Japan's central bank on Wednesday lowered its assessment of the economy and kept its key interest rate at virtually zero to weather a global slowdown, a strong yen and the recent flooding in Thailand... It also expressed concerns about emerging economies and their ability to control inflation amid rapid growth."

A low interest rate could increase investment which is a factor of GFP growth.

http://abcnews.go.com/Business/wireStory/japan-central-bank-interest-rate-14961462#.Tsm2amNR71R

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