The full-employment level of output is called:
A)aggregate demand.
B)aggregate supply.
C)potential output.
D)none of the above.

Question

Quizplus · Accepted Answer

Potential output is the level of real GDP produced when the economy is at full employment, which means that all available resources are being used efficiently. It is also known as the full-employment level of output, as it represents the maximum sustainable level of production in the long run. Aggregate demand and aggregate supply refer to the levels of spending and production in the economy, respectively, but they do not necessarily correspond to the full-employment level of output.

The Full-Employment Level of Output Is Called