Asked by Khush Bhullar on Jun 14, 2024
Verified
Which of the following statements about the capacity utilization rate is false?
A) Generally,manufacturing firms use about 80 to 85 percent of their capacity.
B) Capacity utilization falls during recessions.
C) We will always have some idle plant and equipment because it would be virtually impossible to use every single factory,office and piece of equipment day in and day out.
D) The decreasing investment in overseas manufacturing facilities by U.S.multinational corporations has increased the significance of our capacity utilization rate.
Capacity Utilization Rate
The percentage of a firm's total potential production capacity that is actually being utilized in the production of goods or services.
Manufacturing Firms
Companies engaged in the industrial process of converting raw materials into finished products through human labor and machinery.
- Describe the importance of the capacity utilization rate in economic analysis.
Verified Answer
LL
Laila LohseJun 20, 2024
Final Answer :
D
Explanation :
The statement that decreasing investment in overseas manufacturing facilities by U.S. multinational corporations has increased the significance of our capacity utilization rate is false. There is no connection between the two.
Learning Objectives
- Describe the importance of the capacity utilization rate in economic analysis.
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