Yup, people can somewhat imagine the situation on the margin (what is seen). Ie, what would I do if bread costs 2% less -> I might save 2% less or work 2% less. And think that the modest inflation is the nice nudge stopping them from being too lazy.

But they aren't able to extrapolate few rounds of the game further (unseen). Ie - I might afford to send kids to better school/retire my wife/get healthier/all my neighbors could afford it together with me/...

And entirely unseen is the idea that the natural price deflation could easily be -5℅ or 10% just thanks to the productivity gains.