Potential GDP is the maximum level of GDP that a country can achieve when all of its resources (e.g. labor, capital, technology) are fully employed. It is a theoretical concept that represents the upper limit of an economy's output capacity.

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Potential GDP Is

Question 184

Multiple Choice

Potential GDP is

A) the level of GDP achieved during periods when 100 percent of the labor force is employed.
B) a goal that can never be achieved by the economy.
C) the maximum GDP that an economy actually achieves throughout its entire history.
D) the value of production when all the nation's resources are fully employed.

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