Yes, it would. Dropping prices would provide a disincentive to borrow
And industries that depend on a lot of borrowing would suffer. Like manufacturing, farming and housing, for instance.
and an incentive to use current savings for purposes of investment.
Companies that need to borrow to expand typically don't have "current savings".
Just one last note. A deflation caused by the central bank's tightening credit is damaging. But price deflation caused by a stable money supply is, in my opinion, desirable.
Keeping the money supply from growing with output is tightening.
I've had this discussion before and I understand that the belief in the benefits of an ever-cheapening currency run deep. After all, it's the only system we've ever experienced.
The problem is that it is politicians and bankers who decide on a whim how much money we "need." A gold standard, properly implemented, takes them out of the loop. From that point on, money is supplied by the market.
And, given current production trends, the money supply probably would not be static. Historically, there is around a 2% growth in the supply of gold each year. That's probably where Friedman came up with his number.
Nonetheless, business can adapt to a static money supply. It would be different from what we have now. As I said, debt would be less attractive (though certainly available for sound projects) and saving would be more attractive.
I've got a thread up tonight on Japan's experience in the last decade with a stable money supply. Contrary to popular opinion, they're doing quite well.