Choice "D" is correct. During a recession, potential output (real GDP) will exceed actual output (real GDP).
Choice "b" is incorrect. Real GDP is falling during a recession.
Choice "a" is incorrect. The natural rate of unemployment will not be affected by the various phases of the business cycle. Actual unemployment will change with the cycle.
Choice "c" is incorrect. Actual output will not exceed potential output except at the peak of the cycle, and perhaps not then.
