Potential output refers to the broadest level of real GDP that can be continued over the long term, and real output occurs in real life, whereas potential output depicts the level that could be attained.
What are the real and potential output?
- Real output is defined as the total value of production in inflation-adjusted dollars, remained unchanged.
- Potential output is the maximum amount of goods and services that an economy can produce when it is at its most efficient.
Therefore, Real output and Potential output are different with each another.
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