What is potential GDP?
A)It is the level of real GDP in the long run.
B)It is the difference between current GDP and maximum GDP.
C)It is the level of real GDP in the short run.
D)It is the level of GDP at which inflation is constant.

Question

Quizplus · Accepted Answer

Potential GDP is the level of real GDP that an economy can produce in the long run using all of its available resources without causing inflation. It represents the maximum sustainable output level that an economy can achieve with its available resources and technology.

What Is Potential GDP