SYNDICATE 5 Interest Rate and Housing

M.Ridwan - 29112555

Machadi Dhana – 29112303

M. Khadafi – 29112324

Pedro Putu Wirya – 29112565

Seto Kusparyanti – 29112306

Yuliani Dewi – 29112321

Rahdianto Maulana - 29112554

Problem Statement

In 2003, Japan face their steepest price drop, which fell 0.4% compare to last year.

The deflation already last for 7 years

The government need solution to handle this situation

Theoretical Explanation

The demand curve of money balance. It consist of 2 axis, the price level ( Axis Y ) and aggregate output ( Axis X ).

This graph occurs when the economy near flat part of AS curve.

The increase demand ( due to increase money supply to the market ) will not significantly impact to the increase of price level.

This is the situation of Japan in 2003