All of the following,except one,is another way of thinking of full-employment GDP.Which is the exception?
A)It is the level of GDP at the natural rate of unemployment.
B)It is often referred to as long-run aggregate supply.
C)It is the level of GDP when cyclical unemployment is zero.
D)It is the same as Potential GDP.
E)It is the level of GDP when frictional and structural unemployment is zero.

Question

Quizplus · Accepted Answer

Full-employment GDP refers to the level of output where the economy is operating at its maximum sustainable level, without being overheated. It accounts for the natural rate of unemployment, which includes frictional and structural unemployment but not cyclical unemployment. Therefore, it is not accurate to say it is the level of GDP when frictional and structural unemployment is zero, as these types of unemployment exist even when the economy is at full employment.

All of the Following,except One,is Another Way of Thinking of Full-Employment