Suppose a nation's maximum GDP (with 0 percent unemployment) is $20 trillion. 1. Assuming that full employment

Question:

Suppose a nation's maximum GDP (with 0 percent unemployment) is $20 trillion.
1. Assuming that full employment occurs when there is 5 percent unemployment, how much is full employment GDP?
2. If equilibrium GDP is $18 trillion, how far from full employment GDP is this economy?
3. Which of the following shifts will move this economy closer to full employment?
1. AD shifts to the right.
2. AD shifts to the left.
3. AS shifts to the right.
4. AS shifts to the left.