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Monitoring Money Supply. Why do financial market participants closely monitor money supply movements? [5 marks] Explain why an increase in the money supply can affect

Monitoring Money Supply.

Why do financial market participants closely monitor money supply movements?

[5 marks]

Explain why an increase in the money supply can affect interest rates in different ways. Include the potential impact of the money supply on the supply of and the demand for loanable funds when answering this question.

[5 marks]

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