Potential real GDP is the level of output produced when the unemployment rate finally reaches zero.

Question

Quizplus · Accepted Answer

The potential real GDP is defined as the level of output that an economy can produce with all of its resources fully employed, including labor, capital, and technology. While Zero unemployment is a sign of an economy operating at full employment, it is not a guarantee that potential real GDP has been reached. Other factors, such as technological advancements and capital investments, can also impact potential real GDP.

Potential Real GDP Is the Level of Output Produced When