Which of the Following Is the Best Definition of Potential

question 79

Multiple Choice

Which of the following is the best definition of potential output?

• A) The output that could be produced if the economy were above full employment
• B) The output that could be produced if the economy had no unemployment
• C) The output that could be produced if the economy had no frictional unemployment
• D) The output that could be produced if the economy were at full employment
• E) The output that could be produced if the economy had no structural unemployment

---

Definitions:

Import Tariffs

Taxes imposed by a government on goods and services imported from other countries, often used to protect domestic industries or generate revenue.

Communication Challenges

The obstacles or issues faced during the process of conveying, receiving, and understanding messages among individuals or entities.

Sensitive Knowledge

Information that is critical or private in nature, often requiring careful handling and protection due to its significance or potential impact.

Economies Of Scale

The cost advantages companies achieve as they progress down the learning curve and spread fixed costs over more units of output.