Use the figure below to answer the following question(s).
Figure 10-6
-In the short-run equilibrium depicted in Figure 10-6, the economy's output is
A)equal to potential GDP.
B)less than potential GDP.
C)greater than potential GDP.
D)equal to the economy's full-employment output.

Question

Use the figure below to answer the following question(s).
Figure 10-6 
-In the short-run equilibrium depicted in Figure 10-6, the economy's output is
A)equal to potential GDP. 
B)less than potential GDP. 
C)greater than potential GDP. 
D)equal to the economy's full-employment output.

Quizplus · Accepted Answer

In the short-run equilibrium, the economy's output is less than potential GDP, indicating an output gap where actual output is below the economy's full capacity.

Use the Figure Below to Answer the Following Question(s)