Potential gdp refers to 1) the difference between the highest level of real gdp per quarter and the lowest level of real gdp per quarter within any given year. 2) the level of gdp attained by the country with the highest growth in real gdp in a given year. 3) the extent to which real gdp is above or below nominal gdp. 4) the level of gdp attained when all firms are producing at capacity

4.

Potential GDP is the maximum output when there is full employment of resources or the factors of production.

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