A Temporary Decrease in AD Reduces the Inflation Rate and the Growth Rate in the Short Run At point a, spending is growing at a rate of 10% and real growth is 3% so inflation is 7%. If consumers become fearful and reduce their spending, declines so the AD curve shifts inward. In the short run, wages are sticky so although spending growth declines, wage growth does not. As a result, real growth falls to −1% and the inflation rate falls to 6% at point b. In the long run as fear recedes and wages become unstuck, returns to its normal rate, as does real growth.