The level of real GDP identified by the long-run aggregate supply curve is
A) the full-employment level of real GDP.
B) the level of GDP at which each business firm is experiencing growth in sales.
C) the level of GDP at which each industry is experiencing growth in sales.
D) the level of GDP at which no one is below the poverty line.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve represents the level of real GDP that can be sustained in the long-run when all resources are fully employed. This means that it represents the full-employment level of real GDP where there is no cyclical unemployment or inflationary pressure.

The Level of Real GDP Identified by the Long-Run Aggregate