$\begin{array} { c c c }
\hline \begin{array} { c }
\text { Price level } \
\text { (GDP deflator, } \
\text { 2005 = 100) }
\end{array} & \begin{array} { c }
\text { Aggregate supply } \
\text { (billions of } \
\text { 2005 dollars) }
\end{array} & \begin{array} { c }
\text { Aggregate demand } \
\text { (billions of } \
\text { 2005 dollars) }
\end{array} \
\hline 30 & 28 & 16 \
25 & 25 & 19 \
20 & 22 & 22 \
15 & 19 & 25 \
10 & 16 & 28 \
\hline
\end{array}$
Using the data in the above table, if potential GDP for this economy is $25 billion, then at the present moment real GDP is
A)less than potential GDP.
B)not comparable to potential GDP.
C)at the full-employment level of output.
D)greater than potential GDP.
E)equal to potential GDP.

Question

$\begin{array} { c c c } 
\hline \begin{array} { c } 
\text { Price level } \
\text { (GDP deflator, } \
\text { 2005 = 100) }
\end{array} & \begin{array} { c } 
\text { Aggregate supply } \
\text { (billions of } \
\text { 2005 dollars) }
\end{array} & \begin{array} { c } 
\text { Aggregate demand } \
\text { (billions of } \
\text { 2005 dollars) }
\end{array} \
\hline 30 & 28 & 16 \
25 & 25 & 19 \
20 & 22 & 22 \
15 & 19 & 25 \
10 & 16 & 28 \
\hline
\end{array}$
Using the data in the above table, if potential GDP for this economy is $25 billion, then at the present moment real GDP is
A)less than potential GDP.
B)not comparable to potential GDP.
C)at the full-employment level of output.
D)greater than potential GDP.
E)equal to potential GDP.

Quizplus · Accepted Answer

At the present moment, real GDP is $22 billion (where aggregate supply equals aggregate demand), which is less than the potential GDP of $25 billion.

Using the Data in the Above Table, If Potential GDP