1.Discuss how the loose money policy served to promote economic growth.

The loose money policy by the Bank of Japan made cheap money available to borrowers who invested in new plants and capital. The new plants required provided additional jobs and disposable income for consumers. The result was economic growth for Japan.

2.How will higher interest rates in Japan impact investment in other countries?

As the article points out, some investors have enjoyed a "free ride" by borrowing funds at almost zero interest rates and then investing in other countries. As interest rates go up in Japan it will end the "free ride" and make investors borrow in higher rate markets. At higher interest rates, fewer investment projects will be profitable.

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