Which of the following will result in secular deflation?
A) a one-time rightward shift of the aggregate demand curve
B) continuous rightward shifts of the aggregate demand curve
C) a one-time rightward shift of the long-run aggregate supply curve
D) continuous rightward shifts of the long-run aggregate supply curve

Question

Quizplus · Accepted Answer

Continuous rightward shifts of the long-run aggregate supply curve will result in secular deflation. This is because as the economy grows and becomes more efficient, the cost of production decreases, which leads to a decrease in prices.

Which of the Following Will Result in Secular Deflation