If real GDP is less than potential GDP, then the economy is
A)not in short-run equilibrium.
B)in a full-employment 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 less than potential GDP, then the economy is not producing at its maximum capacity, which means there are unemployed resources, and the economy is in a below full-employment equilibrium. Therefore, the correct choice is option D.

If Real GDP Is Less Than Potential GDP, Then the Economy