Use the figure below to answer the following questions.
Figure 10.3.1
-Refer to Figure 10.3.1.The economy is at its short- run macroeconomic equilibrium.There is a difference between _______ equilibrium real GDP and potential GDP of $_______ billion.
A)below full- employment; 20
B)actual; 0
C)below full- employment; 40
D)above full- employment; 40
E)above full- employment; 20

Question

Use the figure below to answer the following questions.
  Figure 10.3.1
-Refer to Figure 10.3.1.The economy is at its short- run macroeconomic equilibrium.There is a difference between _______ equilibrium real GDP and potential GDP of $_______ billion.
A)below full- employment; 20 
B)actual; 0 
C)below full- employment; 40 
D)above full- employment; 40 
E)above full- employment; 20

Quizplus · Accepted Answer

At the short-run macroeconomic equilibrium point in the figure, the actual real GDP is below potential GDP. The vertical distance between the equilibrium real GDP and potential GDP is $40 billion, indicating a negative output gap. The correct choice is (C) below full-employment; 40.

Use the Figure Below to Answer the Following Questions