If the economy is at long run equilibrium then
A) real GDP can be greater than, less than, or equal to potential GDP.
B) nominal GDP equals potential GDP.
C) real GDP cannot be equal to potential GDP.
D) real GDP equals potential GDP.

Question

Quizplus · Accepted Answer

If the economy is at long run equilibrium, it means that it is producing at its potential level of output or full employment level, with all available resources being utilized efficiently. This implies that the economy's real GDP is equal to its potential GDP.

If the Economy Is at Long Run Equilibrium Then