To improve Japan's declining economy, the Abe administration introduced numerous stimulus packages in hopes of increasing aggregate demand as well as supply overall. The two main plans proposed by the administration were quantitative monetary easing and increasing the consumption tax from 5 to 8 percent. Yet these actions are likely to have a negative impact on the Japanese economy in the long term. Aggregate demand is the total quantity of goods and services demanded in an economy at different prices during a given period. Aggregate supply is the total supply of goods and services produced within an economy at different prices during a given period. When a central bank imposes quantitative monetary easing, it purchases a specified amount of financial assets from private institutions. This increases the price of these financial assets and increases the monetary base. In the case of Japan, with the start of a new fiscal year, the Abe administration decided to resort to monetary easing, which ultimately led to a cheaper yen. This resulted in a rightward shift in aggregate demand from AD1 to AD2, since exports are among the factors that affect aggregate demand. The average price level increases from P1 to P2, because real output also increases from Y1 to Y2. Figure 1 shows the Bank of Japan's quantitative monetary easing and its short-term effects. Yet concerns are growing as some experts say an extravagant drop in the price of the yen will hurt Japan's economy more than it will. help. In the past, when the economy relied primarily on its exports, a cheap yen would have made Japanese goods and services very competitive, leading to an increase in demand for paper. The increase in the consumption tax would then cause a leftward shift in aggregate supply from SARS1 to SARS2. This taxation increases production costs for businesses. Figure 2 shows the market of Japan after the implementation of economic policies. Exchange rates have fluctuated wildly, but the Japanese economy has long faced the danger of an economic crisis due to the excessive price of the yen relative to the country's other major currencies. the world. The decline in the price of the yen under the Abe administration has increased the popularity of its economic policies, but it also has drawbacks. Regarding the consumption tax increase, the Abe administration and the Bank of Japan have the responsibility to carefully evaluate the positive and negative impacts of the falling yen and take corrective measures to avoid economic disaster..