Which of the following is the most likely explanation of Japan's very low market interest rates in the early 2000s?
A) expected deflation
B) an increasing budget deficit
C) an increasing trade surplus
D) an increase in corporate profits

Question

Quizplus · Accepted Answer

Expected deflation was the most likely explanation for Japan's very low market interest rates in the early 2000s. When investors expect prices to fall, they are willing to accept lower interest rates on their investments, leading to lower market interest rates.

Which of the Following Is the Most Likely Explanation of Japan's