Technological change can reduce the inflationary effects of total spending rising over time.

Question

Quizplus · Accepted Answer

Technological change can increase productivity and output, which can help to keep prices stable even if total spending increases. This is because increased production can meet the rising demand for goods and services without causing shortages or pushing up prices. Additionally, technological advancements in payment systems and online shopping can lead to increased price transparency and competition, which can also help to reduce inflation.

Technological Change Can Reduce the Inflationary Effects of Total Spending