Economic growth and business cycles

Question 1

What is the potential output ?

Answer 1

This is the maximum output that can be produced in an economy, given its factor endowments, without generating inflation ; also known as full employment output

Question 2

What is the aggregate production function ?

Answer 2

a functional relationship between the quantity of aggregate output produced and the quantities of inputs used in production

Question 3

What is the equation for aggregate production function ?

Answer 3

Y = A (t) F (K,N)