Economic Definition of long-run aggregate supply full employment. Defined.
Offline Version: PDF
Term long-run aggregate supply full employment Definition: The condition that exists when all resources are engaged in production. In practice, however, this condition is virtually impossible to achieve. An economy will ALWAYS have some unemployed resources, particularly frictionally and structurally unemployed resources. The key characteristic of long-run aggregate supply is that full-employment production is maintained at ALL price levels. In the long run, when all prices and wages are flexible, all markets (financial, product, and especially resource) are in equilibrium, and the level of real production fully employs all available resources.