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a society can increase its potential as follow 1 increase in productivity 2 increase in investment 3 inprove on man-power development

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Difference between actual output and potential output of an economy?

Actual output is the "real" GDP ( gross domestic product). potential output is the targeted output set by the government. the difference between the actual and potential output is UNDEREMPLOYMENT!


What maximum output that an economy can produce without large increase in inflation is the?

The maximum output that an economy can produce without a large increase in inflation is referred to as the economy's "potential output" or "full employment output." This level represents the maximum sustainable level of production that can occur when all resources are utilized efficiently, without causing demand-pull inflation. It is often associated with the natural rate of unemployment and is influenced by factors such as technology, labor force size, and capital stock. When actual output exceeds potential output, inflationary pressures typically arise.


If actual output exceeds potential output eventually what will happen?

According to the theories of macroeconomics, if actual output exceeds potential output, then the output will continue to grow as the price of inputs continues to fall.


What are the imports in industry to increase output and perhaps exports?

what are the imports in indusrty to increase output and perphaps exports


What is potential output in macroeconomics?

Potential output is the capacity to produce should all factors be employed in an economy. For example, it is the output should there be no unemployment, no spare labour and no spare capital. It is unlikely that actual output will be the same as potential ouput since there is always unemployment.

Related Questions

What is important role of superconductor in computer?

Superconductors have the potential to drastically increase computer performance. They can increase the data transfer rates while reducing heat output.


Difference between actual output and potential output of an economy?

Actual output is the "real" GDP ( gross domestic product). potential output is the targeted output set by the government. the difference between the actual and potential output is UNDEREMPLOYMENT!


If actual output exceeds potential output eventually what will happen?

According to the theories of macroeconomics, if actual output exceeds potential output, then the output will continue to grow as the price of inputs continues to fall.


What is output of pH?

pH is a potential, with no unit, it has no input and no output.


What are the imports in industry to increase output and perhaps exports?

what are the imports in indusrty to increase output and perphaps exports


What is potential output in macroeconomics?

Potential output is the capacity to produce should all factors be employed in an economy. For example, it is the output should there be no unemployment, no spare labour and no spare capital. It is unlikely that actual output will be the same as potential ouput since there is always unemployment.


What do you refer to when actual output is higher than potential output?

expansionary output gap has occured.


If the equilibrium output is below potential output?

This is known as the recessionary gap


What will happen if you increase the mass of an object what will the potential energy do?

If you increase the mass of an object, the potential energy will increase.


Achieve large and lasting increase output the economy must achieve increase capcity utilization?

Achieve large and lasting increase output the economy must achieve increase capcity utilization


Why positive feedback unstable?

A: To feedback more of the same signal from the output to increase the input to farther increase the output and farther increase the input will ultimately saturate the system


What happens when actual output exceeds potential output?

inflation rates tend to accelerate