When real and potential GDP are equal,

Name: When real and potential GDP are equal,
Brand: Quizplus
Rating: 4.7 (39 reviews)

Question

Quizplus · Accepted Answer

When real GDP equals potential GDP, it means the economy is operating at its full capacity without overheating or underperforming. This does not necessarily mean that prices will stop changing or that inflation will be zero; rather, it suggests that the rate of inflation will not accelerate or decelerate sharply but is likely to remain stable, assuming other factors influencing inflation do not change significantly.

When Real and Potential GDP Are Equal