Principles of Macroeconomics / Unit 10 MAC 0906 short lesson, about 20 seconds
Output Above Potential Cannot Last
Captions available
The idea
The sequence has a one-line conclusion. An economy cannot sustain output above potential, because the labour market bids wages up and supply shifts back. A demand surge ends as a higher price level, not more output.
In practice
The extra output is real while it lasts, and temporary.
Where people slip
This says nothing about how long, which is where the schools part company.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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