Asked by Tasia Williams on Jun 11, 2024
Verified
During recessions the capacity utilization rate tends to
A) rise.
B) fall.
C) stay about the same.
Capacity Utilization Rate
A measure of how well an entity is using its potential output capacity, often expressed as a percentage.
Recessions
Periods of economic decline marked by falling GDP and other economic indicators, often resulting in higher unemployment rates.
- Understand the implications of recessions on investment and the capacity utilization rate.
Verified Answer
TB
Tianna BattlesJun 14, 2024
Final Answer :
B
Explanation :
During recessions, demand for goods and services decreases, causing businesses to produce less, leading to a fall in capacity utilization rate.
Learning Objectives
- Understand the implications of recessions on investment and the capacity utilization rate.