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QUESTION
The Federal Reserve of the United States of America would like to decrease interest rates in the economy. What open market operation (OMO) action
The Federal Reserve of the United States of America would like to decrease interest rates in the economy. What open market operation (OMO) action should the Federal Reserve undertake? Explain the OMO process in detail. What will happen to the cash rate, interest rates, inflation and GDP? Draw by hand the effect of the OMO process using a MD-MS diagram.
