What is the level of real GDP called in the long-run?
A)frictional GDP
B)short-run GDP
C)potential GDP
D)low capacity GDP

Question

Quizplus · Accepted Answer

The level of real GDP in the long-run is called potential GDP, which represents the maximum level of output an economy can produce with its available resources such as labor, capital, and technology. It is also known as full employment GDP, as it assumes that all available resources are utilized at their full potential. The other options (frictional GDP, short-run GDP, and low capacity GDP) do not accurately describe the level of real GDP in the long-run.

What Is the Level of Real GDP Called in the Long-Run