The required details about potential real gdp is mentioned in below paragraph.
The highest output that an economy can produce when all of its resources and personnel are put to use in profitable economic activity is referred to as potential output. It is the maximum real gross domestic product that, in a real-world scenario, reflects an economy's potential as compared to its actual output.
The following exogenous changes can affect an economy's potential output:
Technology change.
a shift in the work force brought on either immigration or population growth.
Reserve of natural resources has changed.
The productivity of the factors of production changes as a result of changes in technology, whether they are advancements or obsolescence. The output will be improved, for instance, if a technological development lowers the number of capital units needed for employees in a production process. On the other hand, technological obsolescence results in a production process with comparatively reduced productivity and lower potential output.
A vertical line called the potential output curve represents a cap on the overall amount of production in an economy. The potential output line will be shifted by technical development to the right and by technology obsolescence to the left.
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