Question 3- Consider an economy with a shrinking stock of fiat money. Let N; = N, a constant,and M, = z MM for every period t, where z is positive and less than 1. The government taxes each old person 1: goods in each period, payable in fiat money. It destroys the money it collects. . Find and explain the rate of return in a monetary equilibrium. 6. Prove that the monetary equilibrium does not maximize the utility of the futuregenerations. Hint: fillow the steps of the equilibrium with a subsidy, noting that a tax islike a negative subsidy. f. Do the initial old prefer this policy to the policy that maintains a constant stock of fiatmoney? Explain.

Why Choose Us

  • 100% non-plagiarized Papers
  • 24/7 /365 Service Available
  • Affordable Prices
  • Any Paper, Urgency, and Subject
  • Will complete your papers in 6 hours
  • On-time Delivery
  • Money-back and Privacy guarantees
  • Unlimited Amendments upon request
  • Satisfaction guarantee

How it Works

  • Click on the “Place Order” tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
  • Fill in your paper’s requirements in the "PAPER DETAILS" section.
  • Fill in your paper’s academic level, deadline, and the required number of pages from the drop-down menus.
  • Click “CREATE ACCOUNT & SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
  • From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.