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Real GDP
The total value of goods and services produced in a country, adjusted for inflation or deflation, providing a more accurate measure of economic output.
Potential Output
The highest level of real GDP that an economy can achieve when it is operating at full capacity, without causing inflation.
Recessionary Gap
A situation where an economy's real GDP is lower than its potential GDP, leading to underutilized resources and higher unemployment.
Potential Output
The maximum amount of goods and services an economy can produce when it is using all of its resources efficiently.
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