Question

Which theory tries to explain the Japanese crisis of the 1990s?

1) Theory of National Recovery
2) Theory of Japanese Consensus
3) Theory of Spectacular Progress
4) Theory of Japanese Crisis

Answer 1

The Theory of the Japanese Crisis explains the economic challenges that Japan faced in the 1990s. Despite implementing expansionary monetary policies, the country struggled with slow growth and recession. The option (B) is correct.

Step-by-step explanation:

The theory that tries to explain the Japanese crisis of the 1990s is the Theory of Japanese Crisis. Japan's economy experienced a period of slow growth, recession, and extremely slow growth throughout the 1990s and early 2000s.

The Bank of Japan implemented expansionary monetary policy and lowered interest rates, but it had little effect on stimulating aggregate demand and achieving substantial economic growth. Therefore, option (B) is correct.