Question

what are the reason of the increased potential GDP and explain it?​

Answer 1

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Why does it matter?

Over time, an economy can grow without unwelcome inflation only as fast as its potential GDP grows. Think of this as the safe speed limit for economic growth. Too much government spending can produce a surge in demand that exceeds the economy's capacity to produce and triggers inflation.

Answer 2

Answer:

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Explanation:

Why does it matter? Over time, an economy can grow without unwelcome inflation only as fast as its potential GDP grows. Think of this as the safe speed limit for economic growth. Too much government spending can produce a surge in demand that exceeds the economy's capacity to produce and triggers inflation