Potential GDP is the level of real GDP at which
A)there is full employment.
B)there is a recessionary gap.
C)there is over- full employment.
D)prices are sure to rise.
E)aggregate demand equals short- run aggregate supply.

Question

Quizplus · Accepted Answer

Potential GDP is the level of real GDP that can be produced when there is full employment of all available resources, including labor. It represents the economy's maximum sustainable output level.

Potential GDP Is the Level of Real GDP at Which