Saturday, February 28, 2009

Unit 2: The declining Japanese economy

This depressing report from the BBC has one analyst saying the Japanese economy is in terminal decline!

http://news.bbc.co.uk/1/hi/world/7914937.stm

a) Using the AD formula, explain what is happening in the Japanese economy
b) Using an AS/AD diagram and the multiplier concept, explain why Japan could be in terminal dacline

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