Potential output is best defined as __________.

Question

A. An estimate of what an economy could feasibly produce when it fully employs its available economic resources
B. The level of output an economy can produce when the unemployment rate is above 8 percent.
C. The total output an economy is producing when it is in long-run disequilibrium
D. The total output an economy is producing when it is in short-run equilibrium

Answer 1

Potential output is best defined as A. An estimate of what an economy could feasibly produce when it fully employs its available economic resources.