Productive capacity
What Productive capacity means in Economics A-Level, as defined for AQA.
Definitions of Productive capacity
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Reference: AQA
What free market supply-side policies aim to increase, shown by a rightward shift in the Long Run Aggregate Supply (LRAS) curve.
The maximum potential output of an economy, which increases when long-run economic growth occurs.
The maximum potential output of the economy, which increases with long-run economic growth.
The maximum productive capacity of an economy, which long-run aggregate supply represents.
Topics that use Productive capacity
- Aggregate demand and aggregate supply analysis (AQA A-Level)
- Economic growth and the economic cycle (AQA A-Level)
- Supply-side policies (AQA A-Level)
Related terms
- Aggregate demand
- Aggregate supply
- Macroeconomic performance
- Negative output gap
- Real national output
- Supply-side policies
- Aggregate demand components
- Asset price bubbles
Using Productive capacity in the exam
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