Problem
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.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.