The amount of money that people wish to hold to use in ...

[123654777]

The amount of money that people wish to hold to use in transactions varies directly with
 
  A) the income tax rate. B) their planned near-term purchases.
  C) the money supply. D) the interest rate.

Question 2

What is the loanable funds market? What happens if the real interest rate in the market is held above the equilibrium interest rate?
 
  What will be an ideal response?

[hollysheppard095]

Answer to Question 1

B

Answer to Question 2

The loanable funds market is the market where borrowers obtain funds from savers.
In such a market, if the real interest rate is held above the equilibrium interest rate, the quantity of credit supplied will exceed the quantity of credit demanded. This will create a downward pressure on the real interest rate.

[123654777]

Thanks for the timely response, appreciate it

[ecabral0]

Wow, this really help