What is potential or full-employment output?
A)the maximum GDP that an economy actually achieves throughout its entire history
B)achieved during periods when all of the labour force is employed
C)a goal that can never be achieved by the economy
D)the GDP that would be produced if the economy's resources were fully employed at a normal intensity of use
E)the GDP that could be produced if the economy's resources were fully employed at their maximum intensity of use

Question

Quizplus · Accepted Answer

Potential or full-employment output refers to the maximum GDP that an economy can produce when all of its resources are fully employed at a normal intensity of use. It is a theoretical concept that cannot be fully achieved in practice due to various factors such as technological limitations, resource constraints, and cyclical fluctuations in the economy.

What Is Potential or Full-Employment Output