The point at which the long-run aggregate supply curve touches the x-axis is known as:
A) potential output.
B) the accelerator point.
C) the multiplier point.
D) the self-correcting economy point.

Question

Quizplus · Accepted Answer

The point at which the long-run aggregate supply curve touches the x-axis represents the level of output where all inputs are fully employed, and there is no cyclical unemployment. This level of output is known as the potential output or full employment level of output.

The Point at Which the Long-Run Aggregate Supply Curve Touches