Which of the following is true?
A)At full employment, aggregate supply is equal to potential GDP.
B)Potential GDP increases as the price level increases.
C)Aggregate supply is another name for potential GDP.
D)The potential GDP line has a negative slope.
E)Potential GDP decreases as the price level increases.

Question

Quizplus · Accepted Answer

At full employment, aggregate supply is equal to potential GDP because potential GDP represents the maximum output an economy can produce without causing inflation, which aligns with the concept of full employment.

Which of the Following Is True