We can say that the potential level of real GDP is fixed because the long-run aggregate supply curve is a vertical line.

Question

Quizplus · Accepted Answer

The potential level of real GDP is not fixed; it can change over time due to factors like technological advancements, changes in labor force, and capital accumulation. The vertical long-run aggregate supply curve indicates that in the long run, real GDP is determined by these factors, not by the price level.

We Can Say That the Potential Level of Real GDP