Question: The European Central Bank (ECB) would like to decrease the interest rates in the economy. What open market operation (OMO) action should the ECB take?

The European Central Bank (ECB) would like to decrease the interest rates in the economy. What open market operation (OMO) action should the ECB take? Explain in detail the OMO process and its implications for the cash rate, interest rates, inflation and GDP. Draw by hand the effect of the OMO process using the MD-MS diagram

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