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In: Economics

For this part of the project, you’ll collect data on real GDP and potential GDP measures...

For this part of the project, you’ll collect data on real GDP and potential GDP measures from the FRED website.  

– Real GDP (GDPC1) AND Real Potential GDP (GDPPOT), 2007 – current year

After that, answer all these questions.

1. What is the conceptual difference between real GDP and potential GDP? In terms of the economy using their resources, what does it mean if real GDP is less than potential GDP? What does it mean if real GDP is greater than potential GDP?

2. Based on the most recent data, how does current real GDP compare to potential GDP? Interpret this as if you’re an economic policy advisor.

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Expert Solution

Rahul Sunny answered 2 years ago
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