In any year, real GDP

Question

Quizplus · Accepted Answer

Real GDP can be greater or less than potential GDP in any year, depending on various factors such as economic growth, productivity, and fluctuations in the business cycle. Potential GDP represents the maximum level of output an economy can produce with its available resources and technology, while real GDP represents the actual level of output produced in a given year. Therefore, it is possible for real GDP to be below or above potential GDP, depending on whether the economy is operating below or above its full capacity.

In Any Year, Real GDP