Potential GDP refers to the level of
A)real GDP in the long run.
B)nominal GDP in the long run.
C)real GDP in the short run.
D)nominal GDP in the short run.

Question

Quizplus · Accepted Answer

Potential GDP refers to the maximum level of real GDP that an economy can produce in the long run when all available resources are being utilized efficiently. It is the ideal level that an economy could achieve without experiencing inflationary pressures.

Potential GDP Refers to the Level of