Which statement is TRUE about the National Activity Index?
A) When the index has a zero value, the economy has reached a trough.
B) Negative values always mean the economy is in a recession.
C) Positive values indicate the economy may face a period of increasing inflation.
D) Negative values mean the economy is growing more slowly than its long-term trend.

Question

Quizplus · Accepted Answer

The National Activity Index (NAI) is a measure of the overall economic activity in the United States based on 85 different indicators. A negative value indicates that the economy is growing more slowly than its long-term trend, while a positive value indicates the opposite. However, this does not necessarily mean that the economy is in a recession or is facing inflation. Therefore, statements A, B, and C are incorrect.

Which Statement Is TRUE About the National Activity Index