Tuesday, August 17, 2010

Unit 2: The state of the Japanese and Chinese economies in August 2010

A brilliant clip from the BBC containing loads of macroeconomic facts about the Japanese economy

http://www.bbc.co.uk/news/business-10985496

a) How is GDP measured by the expenditure (ie Agg Demand) measure?
b) Using the formula, explain the likely effect of the appreciating Yen on the Japanese economy
c) Explain why consumption and Investment are not growing in japan
d) Why are the very low interest rates in Japan not leading to the anticipated economic growth?
e) Given that the Japanese economy has grown by only 5% in 8 years whilst the Chinese economy has grown by 261% and moved above Japan into second place in the GDP league table (after the USA), explain why (economically) it's still better to be a citizen in Japan rather than in China

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