The concept of 'Potential Output' or 'Potential GDP' refers to:
A. GDP at current market prices
B. Actual GDP in a given year
C. Nominal GDP adjusted for population
D. The maximum output an economy can produce with current resources and technology without inflationary pressure
Answer: Option D
Solution (By JKSSB Mock Tests)
Potential output is the level of real GDP that can be sustained over the long term without generating inflationary or deflationary pressures, given existing resources and technology.
Explanation:
Under a flexible exchange rate system, the exchange rate adjusts automatically to equilibrate the demand and supply of foreign exchange, helping to correct balance of payments imbalances.
Explanation:
Non-tax revenue includes interest receipts, dividends and profits from PSUs, fees, fines, etc. Taxes like corporation tax, income tax and customs duty are tax revenues.
Explanation:
The 1991 Industrial Policy emphasised liberalisation, abolition of industrial licensing for most industries, and encouragement of private and foreign investment.
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