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What Does the Term Potential GDP Mean

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What does the term Potential GDP mean?


Definitions:

Interest Rate

The component of a loan levied as interest to the borrower, usually characterized as an annual percentage of the outstanding loan value.

Aggregate Demand

Total economic interest in goods and services, assessed at a uniform price level throughout a specific period.

Aggregate Supply

The total supply of goods and services produced within an economy at a given overall price level and in a given time period.

Interest Rate Effect

The impact that changes in interest rates have on consumer spending due to the cost of borrowing; generally, as interest rates rise, consumer spending decreases.

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