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Why Is There Unemployment When Real GDP Equals Potential GDP

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Why is there unemployment when real GDP equals potential GDP?


Definitions:

Incentive

A factor, either monetary or non-monetary, that motivates individuals or entities to take a particular action.

Sales Agents

Individuals or entities that act on behalf of a company in selling and marketing its products or services to customers.

Best Interests

Acting in a way that is most beneficial to the welfare or advantage of an individual or group.

Decision Making

The cognitive process of selecting a course of action from among multiple alternatives to achieve a desired outcome.

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