Actual real GDP will be above potential GDP if

Name: Actual real GDP will be above potential GDP if
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Actual real GDP will be above potential GDP if firms are producing above capacity, which means they are producing more than the amount that can be produced with the available resources. This may lead to short-term economic growth but could also lead to inflationary pressures. Therefore, it is important to ensure that the economy is operating at a sustainable level of production.

Actual Real GDP Will Be Above Potential GDP If