1. Suppose that a central bank wanted to enact more contractionary monetary policy. Say which of the following would increase, decrease, or exhibit no change, if the policy was successful.

a) Borrowing

b) GDP

c) Inflation

d) Interest rates

f) Unemployment

2. Suppose the Bank of Japan announced plans for expansionary monetary policy.

a) What specific actions will the Bank take to achieve its goals?

b) What is one possible reason the Bank's actions might to fail to achieve their intended effects?