Which is greater fullcapacity gdp or potential gdp why

Reference no: EM131308905

Two separate capacity constraints are discussed in this chapter:

(1) the actual physical capacity of existing plants and equipment, shown as the vertical portion of the short-run AS curve, and

(2) potential GDP, leading to a vertical long-run AS curve. Explain the difference between the two. Which is greater, fullcapacity GDP or potential GDP? Why?

Reference no: EM131308905

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