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When an economy is below full employment, real GDP is:

ALevel with potential
BLocked to potential
CLess than potential
DLarger than potential
Answer & Solution
Correct answer: C. Less than potential
1. Some workers are idle. 2. Output falls short of capacity. 3. So real GDP is less than potential. _Source: OpenStax Principles of Macroeconomics 3e, Chapter 8, Unemployment._
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