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Question 4 (20 points) Suppose that the government decides that the use of credit cards is bad and introduces a tax on credit card services.

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Question 4 (20 points) Suppose that the government decides that the use of credit cards is bad and introduces a tax on credit card services. 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 effect on the market of Credit card services and the money market. Explain using diagrams

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