2. At the Monetary Policy Meeting hold on 5th of November 2010, the Policy Board of the Bank of Japan decided on purchases of exchange-traded funds (ETFS) and Japan real estate investment trusts (J-REITS). The Bank decided the principal terms and conditions governing operational details of purchases of ETFS and J-REITS, such as the specifics of those to be purchased and the method of purchase in which the Bank appoints a trust bank as trustee (buying different assets from the market). Can you explain –using graphs- what is the effect in the money market? Why has the Central Bank taken this decision? Explain in detail and use the money market and the IS-LM market.

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