Consider the intertemporal production economy with money of


Consider the intertemporal production economy with money of Chapter 12( WIllamson). the government decides that the use of credit cards is bad, and introduces a tax on credit card balances. at is, if a consumer or firm holds a credit card balance of X (in real terms), he or she is taxed τX, where τ is the tax rate. Determine the effects on the equilibrium price and quantity of credit card balances, the demand for money, and the price level, and explain your results.

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Business Economics: Consider the intertemporal production economy with money of
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