Suppose the National Activity Index of the Federal Reserve Bank of Chicago increased from -0.29 in May to -0.13 in June. What is the BEST interpretation of this finding?
A) Economic activity improved slightly from May to June, but the economy is in a recession.
B) Economic activity improved slightly from May to June, but the rate of economic growth is below its historical trend.
C) The rate of economic growth declined in May and June.
D) Economic activity declined from May to June, and the rate of economic growth is below its historical trend.

Question

Quizplus · Accepted Answer

The increase in the National Activity Index from -0.29 in May to -0.13 in June indicates a slight improvement in economic activity. However, the negative values of the index suggest that the rate of economic growth is still below its historical trend. Therefore, option B - "Economic activity improved slightly from May to June, but the rate of economic growth is below its historical trend" - is the most appropriate interpretation.