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

Question

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

Quizplus · Accepted Answer

When actual real GDP is less than potential real GDP, the economy is in a below full-employment equilibrium, indicating that resources are underutilized and unemployment is higher than the natural rate.

-If the Actual Real GDP Is Less Than Potential Real