Suppose that you were to observe GDP climbing even while prices were falling. If you were to take a long-term perspective, you could explain your observation in terms of

Question

Quizplus · Accepted Answer

An increase in potential GDP alone could explain rising GDP amidst falling prices, as it suggests the economy is becoming more productive without necessarily increasing the demand for goods and services, which could keep prices stable or even lead to them decreasing.

Suppose That You Were to Observe GDP Climbing Even While