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Denote r as the real interest rate on nominal bonds, pm as the real interest rate on money, i as the inflation rate, R as

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Denote r as the real interest rate on nominal bonds, pm as the real interest rate on money, i as the inflation rate, R as the nominal interest rate on nominal bonds, RM as the nominal interest rate on money, q as the price of credit card services, and P as the price of goods. a. (2 points) Using the fisher relation, show that the real return on money is less than the real return on nominal bonds. b. (3 points) Suppose that q> R. Then how many goods are purchased with credit cards relative to currency? Why is this the case? Denote r as the real interest rate on nominal bonds, pm as the real interest rate on money, i as the inflation rate, R as the nominal interest rate on nominal bonds, RM as the nominal interest rate on money, q as the price of credit card services, and P as the price of goods. a. (2 points) Using the fisher relation, show that the real return on money is less than the real return on nominal bonds. b. (3 points) Suppose that q> R. Then how many goods are purchased with credit cards relative to currency? Why is this the case

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