The economy's potential output corresponds to the level of
A) natural employment.
B) frictional unemployment.
C) structural unemployment.
D) cyclical unemployment.

Question

Quizplus · Accepted Answer

Potential output is the maximum level of output that an economy can produce without generating inflation. This level of output corresponds to natural employment, which is the level of employment consistent with full utilization of all resources in the economy.

The Economy's Potential Output Corresponds to the Level of