Problem
Suppose that the nominal interest rate is zero, that is, R = 0.
(a) What is the equilibrium quantity of credit card balances?
(b) In what sense does the economy run more efficiently with R = 0 than with R > 0?
(c) Explain your results in parts (a) and (b). Discuss the realism of these predictions.
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.