Suppose the National Activity Index of the Federal Reserve Bank of Chicago drops to -0.83 this month after being above +0.36 for the previous three months. This movement in the index indicates that
A) the economy has probably moved into a recession.
B) the rate of economic growth has slowed, but not enough to suggest that a recession is imminent.
C) the rate of economic growth has dropped below the historical trend rate of growth, and the economy has reached a trough.
D) the economy is at its peak this month but will move into the recession stage in the near future.

Question

Quizplus · Accepted Answer

The National Activity Index is a measure of economic activity in the United States. A decline in the index indicates that economic activity is slowing down. A decline from above +0.36 to -0.83 is a significant drop, and it suggests that the economy has probably moved into a recession.