An above full-employment equilibrium is
A) when real GDP exceeds potential GDP.
B) the period of time when prices are falling.
C) the equilibrium in which the economy is in most of the time.
D) a theoretical possibility but cannot happen in reality.

Question

Quizplus · Accepted Answer

An above full-employment equilibrium is when real GDP exceeds potential GDP, meaning that the economy is producing at a level beyond its maximum sustainable level of output. This is a theoretical possibility and has occurred in the past, though it is not sustainable in the long run and can lead to inflation.

An Above Full-Employment Equilibrium Is