At long- run macroeconomic equilibrium, .
A) real GDP is less than potential GDP but is as close as it is possible to be
B) real GDP equals potential GDP
C) a recessionary gap exists
D) an inflationary gap exists

Question

Quizplus · Accepted Answer

At long-run macroeconomic equilibrium, the economy is operating at its potential level of output, meaning that real GDP equals potential GDP. This occurs when all resources (such as labor and capital) are fully utilized and there is no cyclical unemployment or inflationary pressure.

At Long- Run Macroeconomic Equilibrium,