# We have 2 2 1 t t t t t m c i p i be careful with the

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, we have 2(1)tttttMciPi(be careful with the algebra here notice the squared terms in the solution). Thus, the function  function is 22(1),tttttcic ii, which is increasing in consumption and decreasing in the nominal interest rate, again as expected. c. 1,ttttttMMu ccPP, with 11ttcttMucPand (1)ttmttMucP. Solution: The consumption-money optimality condition is 11(/)1(/)1tmttttcttttucMPiucMPi. After combining exponents, we can write this as 11titttPicMi. Solving for /tMP, we have (1)tttttMciPi. Thus, the function  is (1)1,ttttcic ii.
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