If real GDP is greater than potential GDP, the economy is
A)not in short-run equilibrium.
B)in a recessionary equilibrium.
C)in an above full-employment equilibrium.
D)in a below full-employment equilibrium.
E)in long-run equilibrium.

Question

Quizplus · Accepted Answer

If real GDP is greater than potential GDP, it means that the economy is producing output beyond its full-employment level, indicating a high utilization of resources including labor. This situation suggests an above full-employment equilibrium.

If Real GDP Is Greater Than Potential GDP, the Economy