Question

In the macroeconomic short run

  

a. by definition, the economy is always moving away from full employment.

   

b. actual real GDP always equals potential GDP.

   

c. actual real GDP may be less than or more than potential GDP.

   

d. the unemployment rate is zero.

Answer 1

(C) actual real GDP may be less than or more than potential GDP.

This can be explained as below:-

In macroeconomic short run, during inflationary gap which exists when the demand of goods and services exceeds production due to factors such as higher levels of overall employment, increased trade activities and increased government expenditure. This leads to the real GDP to exceed potential GDP.
On the other hand, during deflationary gap which exists when the demand of goods and services are less than the production due to factors such as higher levels of overall unemployment, decrease trade activities and decreased government expenditure. This leads to the real GDP to be less than the potential GDP.
Hence concluded, in short run in macroeconomics, actual real GDP may be less than or more than the potential GDP.