Isn't it the case, in an earth-centric reference frame, that an object
moving in a straight line, when subjected to a horizontal force
perpendicular to that motion, will move in a circle?


If the force is in fact perpendicular to the MOTION (the course) and not to the
HEADING. In the case of simply banking, the nose does not move (so the heading
remains the same) while the course changes (due to the force you are talking
about). But so long as the nose does not change direction, the force will not
change direction either and the plane will simply continue in a straight line,
in a slip.

(Actually, if you simply bank the plane (with alerons), the nose will tend to
move in the =opposite= direction, because of the drag induced by the alerons.
If your plane uses spoilers, the reverse is true)

Jose

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