In the macroeconomic short run,
A) actual real GDP may be less than or more than potential GDP.
B) actual real GDP always equals potential GDP.
C) the unemployment rate is zero.
D) the economy is always moving away from full employment.

Question

Quizplus · Accepted Answer

In the short run, actual real GDP may be less than or more than potential GDP due to fluctuations in demand, supply shocks, and other economic factors. This can result in periods of inflation or recession, as the economy adjusts to these changes. The unemployment rate may also fluctuate during this period, but it is not always zero, as there may be frictional or structural unemployment that does not disappear even in the long run. However, the economy is not always moving away from full employment, as it may occasionally reach this level in the short run.

In the Macroeconomic Short Run