When the money supply increases why do interest rates fall?This is in reference to monetary policy.

The reason for this is that the interest rate is,
essentially, the price of money.  As you know from basic economics, the price of a good
or service is determined by the supply of and demand for that thing.  Money is no
different.

This means that when the supply of money
changes, the price of money will change too (if demand does not change).  When the
supply of something goes up, its price goes down.  When supply goes down price goes
up.

The reason behind that is that if there is more money
available, lenders cannot charge as much because there is more competition to
lend.