Use the decisive difference to choose the correct explanation. The final column links to the full discussion.
| Concepts | Decisive difference | Why it matters | Read more |
|---|---|---|---|
| Disinflation / deflation | Inflation slows but remains positive / the general price level falls. | A lower positive inflation rate still means rising prices. | p. 4 |
| Actual / potential growth | Real output rises / productive capacity rises. | An AD increase can use spare capacity without shifting LRAS. | p. 70 |
| Fiscal deficit / public debt | Borrowing shortfall over a period / outstanding borrowing at a date. | A smaller deficit can still add to debt. | p. 77 |
| SRAS / LRAS shift | Current production costs / productive capacity changes. | Identify the input-cost or resource mechanism and timing. | p. 44 |