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

Question

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

Quizplus · Accepted Answer

When actual real GDP is less than potential real GDP, it indicates that the economy is operating below its full capacity, meaning there is unemployment and resources are not fully utilized, which is described as a below full-employment equilibrium.

-If the Actual Real GDP Is Less Than Potential Real