Which of the following is most likely to increase the potential output of an economy?
A) a decline in the length of the average work week
B) an increase in the supply of educated and skilled workers
C) a drought
D) an increase in aggregate demand
E) an increase in the minimum wage received by workers

Question

Quizplus · Accepted Answer

An increase in the supply of educated and skilled workers will increase the potential output of an economy by increasing the availability of human capital, which can lead to higher productivity and innovation.

Answer: D
 An increase in aggregate demand can increase the utilization of existing resources, such as labor and capital, which can boost output and potentially increase potential output through investments in new productive capacity.

Which of the Following Is Most Likely to Increase the Potential