potential output

What Can Increase Potential Output?

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What Can Increase Potential Output? Growth in the size of the working population enables an economy to increase its potential output. This can be achieved through natural growth, when the birth rate exceeds the death rate, or through net immigration, when immigration is greater than emigration. What causes an increase in output? Aggregate Supply Explained

What Is Full Employment Level Of Output?

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What Is Full Employment Level Of Output? Full-employment output is the level of real gross domestic product (GDP) that exists when the economy’s unemployment rate is at its natural rate. This natural rate of unemployment doesn’t correspond to an unemployment rate of zero; rather, it is the unemployment rate that exists when there is no