Full-employment output is also called
A) zero-unemployment output.
B) equilibrium output.
C) potential output.
D) zero-savings output.

Question

Quizplus · Accepted Answer

Full-employment output is also known as potential output - the maximum output that can be produced when all of the economy's resources are fully employed. It represents the production level that can be achieved without putting upward pressure on inflation. Therefore, potential output is an important concept for policymakers to determine the most appropriate level of aggregate demand to achieve full employment while maintaining stable prices. Options A and D are incorrect because they don't describe the concept accurately, and option B is too broad and general to be a specific name for full-employment output.

Full-Employment Output Is Also Called