Question：____________ economic growth is determined by supply-side rather than by demand side factors.
Which word correctly completes this statement?
A. Inflationary
B. Actual
C. National
D. Potential
The correct answer is:Potential
Rationale: Potential growth is the rate at which the economy would grow if all resources were utilised: it is therefore determined by factors in the capacity of the economy (supply side), such as increases in the amount of resources available, or in the productivity or resources.
Actual growth is determined both by growth in output (supply side) and aggregate demand (demand side). National and Inflationary were merely distractors.