Problem
Using the graph of the long run and short run aggregate supply and demand, show how GDP generated at full employment is the potential output the economy can generate.
In order to better explain this concept, assume that in the short run, wages and prices are flexible enough to adjust, that at full employment, firms and workers are able to negotiate nominal wages, which will shift the natural rate of GDP and the natural rate of unemployment are defined in the long run and represented by a vertical long run aggregate supply curve.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.