Suppose that Zambia's potential GDP is equal to $ 950 trillion and that its real GDP is equal to $ 900 trillion. According to the neoclassical view, what can you infer about Zambia's economy?

4. Palau's economy is in recession

Explanation:

Data given in the question

Potential GDP = $950 trillion

Real GDP = $900 trillion

By considering the above information as we can see that the real GDP is not more than the Potential GDP so it not shown on the expansion stage in the economy

Whereas the Real GDP is less than the Potential GDP so it is shown on the recession stage in the economy.

Hence, the Zambia economy is in recession stage