Potential output is the most that can be produced in an economy at a particular point in time.

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Quizplus · Accepted Answer

Potential output refers to the maximum amount of goods and services an economy can produce when it is most efficiently using all its resources, not just what can be produced at a particular point in time. It is a theoretical concept used to estimate the capacity of an economy over the long term, considering factors like technology, labor, and capital, rather than immediate production capabilities.

Potential Output Is the Most That Can Be Produced in an Economy