Which of the following is true?
A)During a recession,actual GDP will exceed potential GDP.
B)Actual GDP cannot exceed potential GDP,even for short periods.
C)Actual output may be either above or below potential output depending on how fully resources are utilized.
D)The economy's potential output is the maximum output that could be achieved temporarily during a time of economic boom.

Question

Quizplus · Accepted Answer

Actual output may be above or below potential output depending on how fully resources are utilized. A recession is usually characterized by output below potential, while an economic boom is characterized by output exceeding potential. However, it is possible for the economy to operate at various levels of utilization other than below or above potential.

Which of the Following Is True