Question

what is the difference between real gdp and potential gdp. Is potential gdp the same as d
fully employed

Answer 1

There is difference between the potential GDP and the real GDP, the potential GDP is the full employment level of output. This means this is the output of the the economy if the economy uses its all resources to produce the goods and services. It is the output where the economy is capable of with the given level of the technology and resources. This is the full employment level of output.

The real GDP is the actual output of the economy, the real GDP may be below or above the potential level of GDP depending upon the economic situations of the country. The real GDP calculates the actual money value of all goods and services produced within the domestic territory of the country.