|Posted on April 16, 2014 at 11:25 AM|
To graph an economy that is fully employed, use the aggregate demand and aggregate supply model. The short-run aggregate supply curve, long-run aggregate supply curve, and aggregate demand curve should all intersect at the same spot. Price Level should be labeled on the y-axis and Real GDP should be labeled on the x-axis.
This No Bull Review graph illustrates a fully employed economy using the AD/AS Model. This is also known as an economy's long run equilibrium.
AP Macroeconomics Unit 3 AD/AS & Fiscal Policy