Question

The government decides that the use of credit cards is bad, and introduces a tax on credit card balances. That is, if a consumer or firm holds a credit card balance of X (in real terms), he or she is taxed tX, where t 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.



$1.99
Sales1
Views185
Comments0
  • CreatedDecember 05, 2014
  • Files Included
Post your question
5000