<p>I am learning about potential output. We have been told that it is the amount of output that an economy can produce when using its resources, such as capital and labour, at normal rates/maximum capacity. How could an expansion occur if using resources at maximum capacity is considered 'normal'? </p>

<p>Any answers would be greatly appreciated, thanks!</p>

<macroeconomics><business-cycles>
Question Regarding 'Potential Output'
Will
# Question Regarding 'Potential Output'

(Asked by: username_0 on 2019-04-10)

I am learning about potential output. We have been told that it is the amount of output that an economy can produce when using its resources, such as capital and labour, at normal rates/maximum capacity. How could an expansion occur if using resources at maximum capacity is considered 'normal'?

Any answers would be greatly appreciated, thanks!

**Tags:** macroeconomics, business-cycles


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