Question

question 2
in any year, real gdp
○ always equals potential gdp.
○ might be greater or less than potential gdp.
○ will always be greater than potential gdp because of the tendency of nations to incur inflation.
○ must always be less than potential gdp.

Explanation:

Real GDP is the value of goods and services produced in an economy, adjusted for inflation. Potential GDP is the level of output an economy can produce at full employment. In reality, an economy can operate above (e.g., during booms, with over - utilization of resources) or below (e.g., during recessions, with under - utilization of resources) full employment. So real GDP might be greater or less than potential GDP. The option "always equals potential GDP" is wrong as economies don't always operate at full capacity. "Will always be greater..." is wrong as inflation doesn't guarantee real GDP is above potential, and economies can have recessions. "Must always be less..." is also wrong as booms can push real GDP above potential.

Answer:

B. might be greater or less than potential GDP.