In the long run
A)GDP = potential GDP.
B)unemployment is below its natural rate.
C)LRAS and SRAS lie on the same line.
D)unemployment is above its natural rate.

Question

Quizplus · Accepted Answer

In the long run, the economy will reach its potential GDP, which is the maximum level of output that can be sustained over time given the available resources and technology. This implies that the economy will operate at full employment, with all available resources being utilized efficiently. This is represented by the LRAS curve, which is vertical and indicates the productive potential of the economy. Therefore, the correct answer is A.

In the Long Run