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heere is my question Question 1: CIA model with Khun Tucker conditions Consider a Cash in Advance model with 2 periods, where Mo, Bo are

heere is my question

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Question 1: CIA model with Khun Tucker conditions Consider a Cash in Advance model with 2 periods, where Mo, Bo are given and endowments are Yi, Yz. The unique difference with the model we saw in class is that now only a fraction o of the consumption good of each period is subject to the cash in advance constraint, with 0 0. Solve for the optimal consumption levels, both graphically and alge- braically. 5. Find the money demand. 6. How are the optimal values for consumption and money demand affected by a? Inter- pret. 7. If a were a choice variable of the household, which value would he prefer? (No algebra required, just an intuitive answer)

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