Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Introduction

Question:

Which of the following indicates that the economy is working on its full potential?

Options:

Actual output = Potential output

Actual output < Potential output

Actual output > Potential output

None of the above

Correct Answer:

Actual output = Potential output

Explanation:

Economy works on its full potential when the actual output is equal to the potential output. If the actual output is less, we can conclude that the economy is not utilising its resources to its maximum potential. That means there is underutilization of resources.