3 Aggregate Supply in the Long Run Recall from chapter 3: In the long run,output is determined by factor supplies and technology Y=F(K,L) is the full-employment or natural level of output,the level of output at which the economy's resources are fully employed. "Full employment"means that unemployment equals its natural rate. CHAPTER 9 Introduction to Economic Fluctuations slide 12slide 12 § Recall from chapter 3: In the long run, output is determined by factor supplies and technology Y  F (K , L) is the full-employment or natural level of output, the level of output at which the economy’s resources are fully employed. Y “Full employment” means that unemployment equals its natural rate. 3