If all factors that affect total planned real expenditures are unchanged so that the AD curve does not noticeably move during a 10 year period of real GDP growth,the growing economy would experience
A)secular inflation.
B)secular deflation.
C)demand-pull deflation.
D)cost-push deflation.

Question

Quizplus · Accepted Answer

If the AD curve does not noticeably move during a 10 year period of real GDP growth, it indicates that the factors that affect total planned real expenditures have not changed significantly. However, as the economy grows and real GDP increases, there will be a decrease in the price level due to an increase in the aggregate supply. This is known as secular deflation, which is a long-term, sustained decrease in the overall price level of goods and services in an economy.

If All Factors That Affect Total Planned Real Expenditures Are