For the economy as a whole, high rates of factor utilization are associated with
A)increasing unemployment rates.
B)downward pressure on wage rates.
C)downward shifts in the AS curve.
D)excess demand in factor markets.
E)excess supply in factor markets.

Question

Quizplus · Accepted Answer

High rates of factor utilization indicate that businesses are using their resources at a high level, which could lead to excess demand in factor markets. This may result in rising costs, stimulating inflation in the economy.

For the Economy as a Whole, High Rates of Factor