Along with changes in the level of economic activity, measured by GDP, what other economic variable tends to rise and fall as a consequence?

Which of the following is consistent with secular deflation?

A) a persistently decreasing price level caused by money being withdrawn from the economy B) a persistently increasing price level caused by several periods of economic growth with decreasing AD C) a persistently decreasing price level caused by increases in government expenditures D) a persistently decreasing price level caused by several periods of economic growth with stable AD

A pecuniary externality _____

a. affects the prices facing the third parties on which the externality falls b. affects the products bought by third parties c. affects the production functions of third parties d. affects the production functions of producers of the externalities