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A closed economy is currently producing at its full potential. Suppose there is an improvement in payment technology such that most households are making transactions
A closed economy is currently producing at its full potential. Suppose there is an improvement in payment technology such that most households are making transactions using mobile payment apps. As such, the economy is getting closer to a cashless society. In the context of AS-AD model, evaluate the effects on output, the aggregate price level, and the real money balance in both short run and long run. Explain with the aid of ONE AS-AD diagram.
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