How are potential GDP, full employment and the LAS curve related? ...

[chads108]

How are potential GDP, full employment and the LAS curve related?
 
  What will be an ideal response?

Question 2

If a Lorenz curve moves leftward and becomes closer to the line of equality over time, then
 
  A) the population is growing.
  B) income is growing.
  C) income is being more equally distributed.
  D) income is being more unequally distributed.

[Jane]

Answer to Question 1

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.

Answer to Question 2

C