The full-employment level of real GDP is the level which can be produced with:
A) given technology and productive resources.
B) frictional and structural unemployment equal to zero.
C) cyclical unemployment equal to zero.
D) both a and b.
E) both a and c.

Question

Quizplus · Accepted Answer

The full-employment level of real GDP is not affected by cyclical unemployment because it is beyond the control of the economy's productive capabilities. The full-employment level of real GDP can be produced with the given technology and productive resources, and also with frictional and structural unemployment equal to zero. Therefore, the best choice is E.

The Full-Employment Level of Real GDP Is the Level Which