If real GDP is currently $500 billion, there is 3 per cent cyclical unemployment and the potential nominal GDP is $600 billion, we can conclude with certainty that:

Question

Quizplus · Accepted Answer

The potential GDP is $600 billion, but the current real GDP is only $500 billion. This indicates that there is a difference between the actual GDP and potential GDP, which is called the GDP gap. Therefore, choice C is correct.

If Real GDP Is Currently $500 Billion, There Is 3