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How can the money supply affect the interest rate? Explain briefly and show in the graph!

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Economics

How can the money supply affect the interest rate? Explainbriefly and show in the graph!

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4.2 Ratings (892 Votes)
Answer to the following questionInterest is the price that one hasto give up in oder to keep cash in hand Whenever somebody wantsto keep the cash in hand he has to give up the interest that hewould get if he saved the money So When the money suppy isincreased given the demand for money constant then    See Answer
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