Suppose that many producers guess that there will be deflation, writing their contracts accordingly.12.1.In the short run (compared to the original long run equilibrium), the economy will experience aA. CPI staying the same and GDP decrease.B. CPI decrease and GDP increase.C. CPI staying the same and GDP staying the same.D. CPI increase and GDP staying the same.E. CPI staying the same and GDP increase.F. CPI decrease and GDP staying the same.G. CPI increase and GDP increase.H. CPI decrease and GDP decrease.I. CPI increase and GDP decrease.12.2.In the long run (compared to the original long run equilibrium), the economy will experience aA. CPI increase and GDP staying the same.B. CPI decrease and GDP decrease.C. CPI staying the same and GDP staying the same.D. CPI staying the same and GDP decrease.E. CPI increase and GDP decrease.F. CPI decrease and GDP staying the same.G. CPI staying the same and GDP increase.H. CPI decrease and GDP increase.I. CPI increase and GDP increase.Suppose that many producers guess that there will be deflation, writing their contracts accordingly. Solution a) At the time of deflation, the CPI will decrease and due to lack of demand, the GDP will fall as well. The answer is \"H\", The CPI decrease the GDP decrease. b) In the long run, the CPI will increase with the increasing demand and GDP will increase too. The answer is \"I\", CPI increases GDP increases..