In Order To Maintain A Stable And Low Inflation European Central Bank Ecb Would

In order to maintain a stable and low inflation, European Central Bank (ECB) would like to increase 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 Money Demand-Money Supply (MD-MS) diagram.

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