Suppose in an economy utility function is given by:

ln(c_1,t) + b ln(c_2,t+1) where, b is a positive parameter. Given the young person's real demand for money is

(a) Prove that real money balances is given by: q =by/(1 + b). SHOW YOUR STEPS.

(b) Derive expressions for the lifetime consumption pattern: SHOW YOUR STEPS.

(c)What effects does an increase in b have on real money balances and the lifetime consumption pattern? Give an intuitive interpretation of the parameter b.