In any year, real GDP
A) must always be less than potential GDP.
B) might be greater or less than potential GDP.
C) will always be greater than potential GDP because of the tendency of nations to incur inflation.
D) always equals potential GDP.

Question

Quizplus · Accepted Answer

Real GDP can either exceed or fall short of potential GDP, depending on various economic factors such as demand, supply shocks, and policy decisions. Potential GDP represents an economy's maximum sustainable output, while real GDP is the actual output.

In Any Year, Real GDP