The potential output line is:
A) vertical because it shows that a higher price level will not bring about higher output.
B) vertical because it shows that a higher price level will bring about higher output.
C) horizontal because it shows that a higher price level will not bring about higher output.
D) horizontal because it shows that a higher price level will bring about higher output.

Question

Quizplus · Accepted Answer

The potential output line is vertical because it represents the maximum amount of goods and services an economy can produce when it is most efficient. Therefore, changes in the price level do not affect this maximum output level.

The Potential Output Line Is