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.
E)It is the maximum output possible in a period of time.

Question

Quizplus · Accepted Answer

Potential GDP is the level of real GDP that an economy can achieve in the long run when it is operating at full capacity, without causing inflation to rise.

What Is Potential GDP