When capacity utilization rate is high:
A)the price level is likely to go up.
B)consumption is likely to go down.
C)investment is likely to increase.
D)the rate of interest is likely to decrease.
E)aggregate supply of goods is likely to remain constant.

Question

Quizplus · Accepted Answer

When capacity utilization rate is high, firms are running at full capacity and may need to invest in new equipment and expand production facilities to meet the demand. Therefore, investment is likely to increase.

When Capacity Utilization Rate Is High