-In the figure above, in the short-run macroeconomic equilibrium
A) there is no structural unemployment.
B) real GDP is greater than potential GDP.
C) real GDP equals potential GDP.
D) real GDP is less than potential GDP.

Question

-In the figure above, in the short-run macroeconomic equilibrium
A) there is no structural unemployment. 
B) real GDP is greater than potential GDP. 
C) real GDP equals potential GDP. 
D) real GDP is less than potential GDP.

Quizplus · Accepted Answer

In the short-run macroeconomic equilibrium, if real GDP is less than potential GDP, it indicates that the economy is not operating at its full capacity, leading to underemployment and possibly higher levels of cyclical unemployment. This situation does not necessarily mean there is no structural unemployment, as structural unemployment can exist independently of the economy's current position relative to its potential output.

-In the Figure Above, in the Short-Run Macroeconomic Equilibrium