- (f) Assume that > 0, 0 = 1, B(T) 0 (for all t), and that the government balances its budget by means of lump-sum taxes. Show that an increase in the money growth rate leads to a steady state increase in consumption and the capital stock but causes an ambiguous effect on real money balances. Explain the intuition behind your results. (g) Make the same assumption as in part (f) and derive the long-run effects on capital, consumption, and real money balances of a tax-financed increase in government consumption. Explain the intuition behind your results