In any year, the real GDP of an economy

Question

Quizplus · Accepted Answer

In any year, the real GDP of an economy may be greater or less than potential GDP. Potential GDP represents the maximum level of output an economy can produce with its available resources, whereas real GDP represents the actual level of output produced in a given period. Factors such as changes in technology, labor force participation, and government policy can all affect the level of real GDP in an economy, causing it to deviate from potential GDP.

In Any Year, the Real GDP of an Economy