If the economy is at macroeconomic equilibrium, then real GDP
A) might be equal to, greater than or less than potential GDP
B) must be greater than potential GDP.
C) must equal potential GDP.
D) must be less than potential GDP.
E) cannot be compared to potential GDP.

Question

Quizplus · Accepted Answer

Macroeconomic equilibrium occurs when aggregate demand equals aggregate supply, which can happen at, above, or below potential GDP. Potential GDP represents the maximum sustainable output of an economy, but the actual output (real GDP) can vary due to economic fluctuations.

If the Economy Is at Macroeconomic Equilibrium, Then Real GDP