Potential Output Depends on All of the Following Except One

question 108

Multiple Choice

Potential output depends on all of the following except one. Which is the exception?

• A) the supply of labor
• B) labor productivity
• C) the stock of capital
• D) the technology in current use
• E) the number of consumers in the market

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Definitions:

Efficient Taxation

A taxation system designed to minimize the economic costs or distortions that it imposes on society, while achieving desired revenue and distributional effects.

Excess Burden

The cost to society created by market inefficiency, typically due to taxes or government policies that distort resource allocation.

Progressive

Relating to progressive policies or movements that advocate for change, reform, and innovation, often in the social, political, or economic sphere.

Elastic Demand

refers to a situation where the quantity demanded of a good or service is highly responsive to changes in its price.