Potential output of the country when viewed over long periods of time:
A)Rises in spurts and then starts a downward trend that can last years
B)Is surprisingly constant
C)Always decreases
D)Tends to rise over time

Question

Quizplus · Accepted Answer

The potential output of a country tends to rise over time as the population grows, technology improves, and productivity increases. While there may be temporary dips or recessions, the overall trend is upward. This can be seen in the long-term economic growth of many developed countries.

Potential Output of the Country When Viewed Over Long Periods