What is meant by the natural level of income and employment


Problem

1. What is meant by the natural level of income and employment? Why is the long-run aggregate supply curve vertical at the natural level?

2. What is the difference between the short-run aggregate supply curve and the long-run aggregate supply curve? Are they ever the same?

3. Is it possible that increased international economic transactions could affect the aggregate supply curves? Why or why not?

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Macroeconomics: What is meant by the natural level of income and employment
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