Potential real GDP is the GDP that economists would expect to observe when the unemployment rate is zero.

Name: Potential real GDP is the GDP that economists would expect to observe when the unemployment rate is zero.
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Potential real GDP is the level of GDP attainable when the economy is operating at a high level of resource use, not necessarily when unemployment is zero. It accounts for the natural rate of unemployment due to factors like frictional and structural unemployment.

Potential Real GDP Is the GDP That Economists Would Expect