How are potential GDP, full employment and the LAS curve related?
What will be an ideal response?
When the economy is at full employment there is no cyclical unemployment and the economy is at its potential level of real GDP. The LAS curve is vertical at the level of potential real GDP.
Economics
You might also like to view...
If the interest rate on euro-denominated assets is 13 percent and it is 15 percent on peso-denominated assets, and if the euro is expected to appreciate at a 4 percent rate,
for Manuel the Mexican the expected rate of return on euro-denominated assets is A) 11 percent. B) 13 percent. C) 17 percent. D) 19 percent.
Economics
If the real interest rate is 3% and the expected inflation rate is 6%, then the nominal interest rate is
A) 0.5%. B) 2%. C) 3%. D) 9%.
Economics