Full employment

Full Employment - FE Equilibrium exists where AD intersects SRAS and LRAS at the same point

Recessionary Gap - Exists when equilibrium occurs below full employment output, AD increases

Inflationary Gap - Exists when equilibrium occurs beyond FE output, AD increases
u - Stands for unemployment
pi - Inflation

LRAS - Vertical line at an output level that represents the quantity of goods and services a nation can produce over sustained period using all of its productive resources as efficiently as possible with all of the current tech available to it 

1. Stable at full employment 
2. LRAS curve represents a point on an economy's PPC 
3. Synonymous with PPF curving outward (change in resource, tech, economic growth)
4. Doesn't change as price level changes