Which of the following is true of the concept of economic capacity?
A)It is equal to actual GDP.
B)It is very expensive for an economy to produce at a higher level of output.
C)It is impossible for an economy to produce at a higher level of output.
D)It is the amount firms prefer to produce at any price level.
E)It will always increase over time.

Question

Quizplus · Accepted Answer

Economic capacity refers to the maximum output an economy can produce without leading to inflation. Producing beyond this capacity can be very costly due to inefficiencies and resource constraints.

Which of the Following Is True of the Concept of Economic