Long-run aggregate supply represents the macroeconomic performance targets of full employment and potential GDP.

Question

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Long-run aggregate supply is the level of real GDP that the economy would produce if all prices, including nominal wages, were fully flexible. It represents the potential GDP of an economy and therefore, full employment and potential GDP are the macroeconomic performance targets of long-run aggregate supply.

Long-Run Aggregate Supply Represents the Macroeconomic Performance Targets of Full