The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms.
TABLE 19-1
-Refer to Table 19-1.In the year 2014,it is probably the case that workers are ________ and factories are ________.
A)facing cyclical unemployment; facing temporary shut downs
B)working longer than normal hours; facing temporary shutdowns
C)experiencing zero unemployment; operating extra shifts
D)experiencing zero unemployment; operating beyond their normal capacity
E)working longer than normal hours; operating beyond their normal capacity

Question

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms.
  TABLE 19-1
-Refer to Table 19-1.In the year 2014,it is probably the case that workers are ________ and factories are ________.
A)facing cyclical unemployment; facing temporary shut downs 
B)working longer than normal hours; facing temporary shutdowns 
C)experiencing zero unemployment; operating extra shifts 
D)experiencing zero unemployment; operating beyond their normal capacity 
E)working longer than normal hours; operating beyond their normal capacity

Quizplus · Accepted Answer

The high unemployment rate of 8% suggests that there is cyclical unemployment, meaning workers are facing temporary layoffs due to a weak economy. The low capacity utilization rate of 70% suggests that factories are operating below their normal capacity and may be facing temporary shutdowns. Therefore, choice A is the best answer.

The Table Below Provides Macroeconomic Data for a Hypothetical Economy