When all capital and labor are fully utilized, the economy is said to be
A)at the peak of the business cycle.
B)experiencing an expansion.
C)at full employment.
D)sustainable.

Question

Quizplus · Accepted Answer

When all capital and labor are fully utilized, the economy is said to be at full employment. This means that there is no cyclical unemployment and the economy is producing at its potential output. However, it does not necessarily mean that the economy is at the peak of the business cycle or experiencing an expansion, as these conditions can occur even when there is some unemployment. "Sustainable" is not a relevant term in this context.

When All Capital and Labor Are Fully Utilized, the Economy