Potential_output Potential_output

Potential output - Definition and Overview

Related Words: Ability, Aptitude, Budding, Bump, Caliber, Capability, Capacity, Chance, Conditional, Contingency, Contingent, Covert, Cryptic, Developing, Dowry

In economics, potential output refers to the highest level of real Gross Domestic Product that can be sustained. If actual GDP rises and stays above potential output, then (in the absence of wage and price controls) inflation tends to increase. This is because of the limited supply of workers and their time, capital equipment, and natural resources, along with the limits of our technology and our management skills. Potential output in macroeconomics corresponds to one point on the production possibilities frontier (or curve) for a society as a whole seen in introductory economics, reflecting natural, technological, and institutional contraints.

Potential output has also been called the "natural gross domestic product." If the economy is at potential, the unemployment rate equals the NAIRU or the "natural rate of unemployment."

Example Usage of Potential

Javon_Jackson: RT @JAYCRO877: Potential:THEN & NOW" hosted by @DjGrand K & @DJPEST>>>http://bit.ly/1wFhh8 download support my homie!
owGastroSystem: Stoma Complications: There are many Potential complications related to a stoma (ostomy). The stoma is rich in blood... http://bit.ly/1fIhfB
Leah2430: Somebody told me, you had boyfriend that looked like a girlfriend that i had in febuary of last year, its not cofidential i got Potential
Copyright 2009 WordIQ.com - Privacy Policy  :: Terms of Use  :: Contact Us  :: About Us
This article is licensed under the GNU Free Documentation License. It uses material from the this Wikipedia article.