The full-employment level of GDP is
A) endowments.
B) long-run aggregate demand.
C) long-run aggregate supply.
D) economic growth.

Question

Quizplus · Accepted Answer

The full-employment level of GDP is the level of output at which the economy is producing at its potential, using all of its available resources in the most efficient manner possible. This occurs at the intersection of the long-run aggregate supply curve and the aggregate demand curve. Therefore, long-run aggregate supply is the correct answer.

The Full-Employment Level of GDP Is