Potential output is determined by all the following variables except one, which is:

Question

Quizplus · Accepted Answer

Potential output, also known as full employment output, is determined by the economy's supply side factors such as technology, capital, and labor. Aggregate demand, on the other hand, affects the actual output but not the potential output, which is the economy's ability to produce goods and services when it is operating at full capacity.

Potential Output Is Determined by All the Following Variables Except