The potential output of a country would increase as a result of each of the following, except:
A) an increase in population.
B) an increase in capital per worker.
C) technological innovation that increases labor productivity.
D) depreciation of the capital stock.

Question

Quizplus · Accepted Answer

Depreciation of the capital stock would decrease the potential output of a country as it means a reduction in the amount of physical goods and equipment available for production. The other options would increase potential output.

The Potential Output of a Country Would Increase as a Result