Which of the Following Statements About Potential GDP Is True

question 92

Multiple Choice

Which of the following statements about potential GDP is true?

• A)Potential GDP is not equal to the maximum level of real GDP.
• B)Potential GDP is equal to the downward trend in real GDP.
• C)Potential GDP represents the GDP a country will experience when the real interest rate is equal to zero.
• D)Potential GDP represents the long-run tendency of the economy to grow.
• E)Potential GDP is equal to the average level of real GDP.

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