What's it: The natural rate of unemployment (NARU) is the unemployment rate when the economy is operating at full employment. Sometimes, it is equated with the non-accelerating inflation rate of unemployment (NAIRU), which is the
Potential GDP
Long-Run Macroeconomic Equilibrium and Its Explanation
What's it: Long-run macroeconomic equilibrium occurs when the aggregate demand curve intersects the short-run aggregate supply curve at the point of the long-run aggregate supply curve. In other words, the short-run macroeconomic
Potential GDP: Determinants, Importance, How to Calculate It
What's it: Potential GDP refers to the maximum output an economy can produce using its existing economic resources. It represents an economy's long-run aggregate supply. At this level of output, the economy will fully utilize all its resources and