Potential GDP is

Question

Potential GDP is

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Potential GDP is the level of output that an economy can produce when it is fully employed, with no cyclical unemployment. It is often used as a measure of the economy's long-term growth potential. It is not the same as real or nominal GDP, which represent actual output produced in a given time period. The Lucas wedge is a concept related to the gap between actual and potential GDP, but it is not another name for potential GDP. The Okun gap is the difference between potential GDP and actual GDP, but it is not relevant to the definition of potential GDP itself.

Potential GDP Is