@simrin-- I wish I had seen this article last week, before my econ test! I had several questions about real and potential GDP on my economy test last week. I got one wrong.
The question was a true or false. It asked: "If the economy is in equilibrium, it means that it must be functioning at potential GDP." I answered true and got it wrong. I thought that for the economy to be at equilibrium, it must have reached full employment and potential GDP.
But apparently, it doesn't have to be so. My instructor said that the economy can be functioning at less than full employment and still be at equilibrium.