ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -"Productive capacities are the productive resources, entrepreneurial capabilities and production linkages that together determine a country’s ability to produce goods and services that will help it grow and develop."

Detailed explanation-2: -Production capacity is the maximum output that can be achieved in the production process of manufactured goods. It’s generally a part-based metric that identifies the most goods that can be created given a set amount of resources (time, labor, materials).

Detailed explanation-3: -With more effective labour, a nation has bigger potential to do their best, thus has higher output because of a positive impact on labour productivity that increases its efficiency, hence the growth of the GDP. Size of capital – The number of financial resources.

Detailed explanation-4: -Economic growth is an increase in the capacity to produce. Therefore anything that increases that capacity is economic growth. The ability to produce depends on: The stock of capital per worker: All else equal an economy with more physical capital can produce more than an economy with less physical capital.

Detailed explanation-5: -Potential output is the maximum amount of goods and services an economy can turn out when it is most efficient-that is, at full capacity. Often, potential output is referred to as the production capacity of the economy. Just as GDP can rise or fall, the output gap can go in two directions: positive and negative.