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when the aggregate demand curve and the short run aggregate supply curve are in equilibrium, gdp Could be: less than potential GDP, be at potential GDP, be greater than potential GDP
The level of output that a country's economy is capable of producing at a constant rate of inflation is referred to as potential gross domestic product (GDP) in the OECD's Economic Outlook publication. Even while an economy can occasionally create more than its maximum amount of output, doing so results in higher inflation. Basic Details. US Real Potential GDP currently stands at 24.29T, up from 24.18T in the previous quarter and 23.88T a year ago. One of the theoretical components of national income accounting, known as potential GDP, makes the assumption that full employment has been reached in an economy and that aggregate demand does not exceed aggregate supply. Output Gap: Like the rise and fall of GDP, the output gap can move in both positive and negative directions.
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