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(a) Describe clearly how the interest rate is determined in:
(i) Loanable Funds Framework; and
(ii) Liquidity Preference Framework.
(b) According to Liquidity preference analysis an increase in money supply always leads to a fall in the rate of interest.
Describe using diagrams, how an increase in money supply leads to a fall in the interest rate.(c) Critically assess the statement in part (b)
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