Two separate capacity constraints are discussed in this chapter: (1) the actual physical capacity of existing plants
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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?
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Related Book For 
Principles Of Macroeconomics
ISBN: 9780374146412
10th Edition
Authors: Karl E. Case, Ray C Fair, Sharon C Oster
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