What is potential GDP and what is the relationship between actual and potential real GDP?
What will be an ideal response?
The quantity of GDP at full employment is called potential GDP. Over the business cycle, real GDP fluctuates around potential GDP. When the unemployment rate is higher than the natural rate, real GDP is less than potential GDP and when the unemployment rate is lower than the natural rate, real GDP exceeds potential GDP.
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The profit-maximizing level of output and the profit-maximizing price for an oligopolist cannot be calculated when we don't know
A) what the concentration ratio for the oligopolist's industry is. B) what the minimum efficient scale in the oligopolist's industry is. C) the demand curve and the marginal revenue curve of the oligopolist. D) the type of barrier to entry that exists in the oligopolist's industry.
A recession is a decline in:
A. The inflation rate that lasts six months or longer B. The unemployment rate that lasts six months or longer C. Real GDP that lasts six months or longer D. Potential GDP that lasts six months or longer