Which of the following is true in the short run but not in the long run?
A)Actual output is equal to potential output.
B)Actual output can exceed potential output.
C)Structural unemployment can exist.
D)Frictional unemployment can exist.
E)Real and nominal GDP can differ.

Question

Quizplus · Accepted Answer

In the short run, it's possible for actual output to exceed potential output due to high demand and the economy operating above its sustainable capacity. However, in the long run, actual output tends to converge with potential output as resources are fully utilized and the economy cannot sustainably operate above its potential output due to constraints like labor and capital.

Which of the Following Is True in the Short Run