Actual GDP

Question

Actual GDP

Quizplus · Accepted Answer

Actual GDP is the level of GDP that is currently being produced in the economy, while potential GDP is the maximum level of GDP that can be produced given the economy's resources and technology. During a recession, actual GDP is typically lower than potential GDP, as there is a gap between the economy's output and what it could be producing if all resources were fully utilized. Therefore, option B is correct. Option A is incorrect, as actual GDP is typically lower than potential GDP during recessions. Option C is incorrect, as actual and potential GDP have different meanings. Option D is incorrect, as actual GDP is typically higher than potential GDP during economic booms as resources are fully utilized.