Japan real risk-free interest rate


Problem: What initial effect, if any, does each of the following shocks have on Japan's real risk-free interest rate? Please use supply and demand curve to support conclusion (please label axes & curve).

a) A decrease in the Japanese money supply with no changes in prices

b) A decrease in global lending to Japan

c) An increase in private saving in Japan

d) An increase in the Japanese governments budget deficit

e) Speculative short-term international capital inflows to Japan

f) An increase in Japan's real GDP

g) A rise in Japan's expected inflation rate.

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Macroeconomics: Japan real risk-free interest rate
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