Which of the Following Is False About Potential Output

Multiple Choice

Which of the following is false about potential output?

A) It is the level of output an economy can achieve when labor is employed at its natural level.
B) It is the long run output level that guarantees price stability.
C) It is also called the natural level of real GDP.
D) If a country is producing its potential output, then it is producing at a point on its production possibilities frontier.