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POTENTIAL REAL GROSS DOMESTIC PRODUCT: The total real output (real gross domestic product) that the economy could produce if resources are fully employed. In other words, the economy is operating ON the production possibilities frontier. Full employment is generally indicated by achieving what is termed the natural unemployment rate, which is an unemployment rate in the neighborhood of about 5%. If the economy is at full employment then actual gross domestic product is equal to potential gross domestic product and the actual unemployment rate is equal to the natural unemployment rate. The macroeconomy is thus living up to its potential, at least in terms of producing wants-and-needs satisfying goods and services.
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SLOPE, SHORT-RUN AGGREGATE SUPPLY CURVE The positive slope of the short-run aggregate supply curve, reflecting the direct relation between the price level and real production, results for three primary reasons--inflexible resources, frictional and structural unemployment, and purchasing power imbalances.
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The earliest known use of paper currency was about 1270 in China during the rule of Kubla Khan.
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"Most human beings have an almost infinite capacity for taking things for granted. " -- Aldous Huxley, writer
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IEBNR
Income Earned But Not Received
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