In 1992 the Central Bank of Japan Resisted Implementing an Expansionary

question 24

Multiple Choice

In 1992 the Central Bank of Japan resisted implementing an expansionary monetary policy because

• A)it believed that output had been beyond its full-employment level in Japan during the late 1980s and early 1990s.
• B)it followed the real business cycle approach.
• C)it believed that the only way to cure Japan's economic problems was by reducing the large government budget deficit the country was suffering from.
• D)it believed that the only way to cure Japan's economic problems was by reducing the large balance of trade deficit the country was suffering from.

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Definitions:

Marginal Revenue

The extra revenue generated from the sale of an additional unit of a product or service.

MC = MR

The condition where a firm's marginal cost equals its marginal revenue, often used to determine the optimal level of production.

Profit Maximized

The point at which a firm achieves the highest profit possible, given its production costs and the market price of its goods or services.

Marginal Revenue

Additional revenue earned from the sale of one more unit of a good or service.