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When the supply of loanable funds increases, it typically leads to lower interest rates, making borrowing cheaper. This can stimulate investment and economic growth, which may increase domestic production and exports. However, if the increased supply of loanable funds leads to a stronger domestic currency, it could make exports more expensive for foreign buyers, potentially offsetting some of the initial increase in exports. Ultimately, the net effect on exports depends on various factors, including currency valuation and global demand.

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