Options:

1. Long-term or short-term

2. Stronger in Germany / Stronger in Japan / The same in both countries

In Japan, suppose that changes in short-term interest rates translate quickly into changes in long-term interest rates, while in Germany long-term interest rates do not respond as much to changes in short-term rates. In which country would you expect the interest-rate channel of monetary policy to be stronger? A household's decision to buy a car or house or a firm's decision to engage in long-run investment projects generally depends on ((Click to select) interest rates and so the interest-rate channel is likely to be (Click to select)