Which of the following is true when an economy is in long-run equilibrium?

A) Actual output can exceed potential output.
B) Potential output can exceed actual output.
C) Actual output must equal potential output.
D) Real GDP must equal nominal GDP.
E) Expected price level can exceed actual price level.

Potential Output

The highest level of real GDP that can be sustained over the long term without increasing inflation, reflecting the economy's maximum productive capacity.

Actual Output

The real quantity of goods and services produced by an economy, as opposed to its potential or desired output.

Long-Run Equilibrium

A state in economics where all factors of production and outputs are fully optimized, with no external pressures causing shifts.