Yes in this hypothetical, stock indexes would stay roughly constant in nominal terms, but would rise just as fast in real terms.
And GDP will increase in real terms if money supply is fixed, but not in nominal terms.
Both of these are because we’d have deflation.
Thanks for helping clear this up! That makes a lot of sense.
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Yes in this hypothetical, stock indexes would stay roughly constant in nominal terms, but would rise just as fast in real terms.
And GDP will increase in real terms if money supply is fixed, but not in nominal terms.
Both of these are because we’d have deflation.
Thanks for helping clear this up! That makes a lot of sense.