what-is-the-relationship-between-potential-gdp-and-the-gdp-gap

Question

What is the relationship between potential GDP and the GDP gap?

Accepted Answer

The GDP gap is the difference between actual GDP and potential GDP.

Answer

Potential GDP is irrelevant to the GDP gap.

Answer

Potential GDP is always greater than the GDP gap.

Answer

The GDP gap is the sum of actual GDP and potential GDP.