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Question 7 of 22
The full employment level of real GDP is $6 billion for the recently formed island nation of Turtleopolis. Use the line
segment to show long-run aggregate supply on the graph.
(Which blue dot do I set the line to?)

lt Question 7 of 22 The full employment level of real GDP is 6 billion for the recently formed island nation of Turtleopolis Use the line segment to show longru class=

Respuesta :

Answer:

It is a vertical line at Real GDP = 6 billion

Points (6,0) and (6,8)

Explanation:

Long-run aggregate supply curve looks like a vertical line, while short-run aggregate supply curve is an upward-sloping line. The question says the full employment is at $6 billion, so that is where your long-run aggregate supply curve is.

The long-run aggregate supply on the graph will be the vertical line at Real GDP = 6 billion at Points (6,0) and (6,8)

The long-run aggregate supply refers to the output that an economy can be able to produce by using all its factors of production. In this case, the economy is operating at full employment.

It should be noted that while the short-run aggregate supply curve is an upward-sloping line, the long-run aggregate supply curve is a vertical line.

In this case, since the full employment is at $6 billion, then the long-run aggregate supply curve will be at that point which is at points (6,0) and (6,8)

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