Secular deflation occurs when
A) there is no economic growth and aggregate demand falls.
B) aggregate demand increases at the same time there is no economic growth.
C) aggregate demand remains unchanged while economic growth increases long-run aggregate supply.
D) both aggregate demand and aggregate supply are shifting left.

Question

Quizplus · Accepted Answer

Secular deflation occurs when the economy's long-run aggregate supply increases due to economic growth, while aggregate demand remains unchanged. This leads to a decrease in the general price level over time as the supply of goods and services increases relative to demand.

Secular Deflation Occurs When