If real GDP is less than potential GDP, then the economy is _ equilibrium.
A) in long- run macroeconomic
B) at an above full- employment
C) at a below full- employment
D) not in short- run macroeconomic

Question

Quizplus · Accepted Answer

If real GDP is less than potential GDP, it means that the economy is producing below its full capacity, indicating that there are still unemployed resources like labor and capital. Thus, the economy is operating at a below full-employment equilibrium.

If Real GDP Is Less Than Potential GDP, Then the Economy