Real GDP equals potential GDP when labour, capital, land/resources, and entrepreneurship are fully employed.

Name: Real GDP equals potential GDP when labour, capital, land/resources, and entrepreneurship are fully employed.
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Question

Quizplus · Accepted Answer

Potential GDP is the maximum level of real GDP that can be produced while all four factors of production are fully employed. Therefore, when all factors of production are fully employed, real GDP will equal potential GDP.

Real GDP Equals Potential GDP When Labour, Capital, Land/resources, and Entrepreneurship