The Phase of the Business Cycle Where Real Domestic Output

question 170

Multiple Choice

The phase of the business cycle where real domestic output is at a minimum is called:

• A)the peak.
• B)a recession.
• C)the trough.
• D)the pits.

---

Definitions:

Capital-labor Ratio

The ratio of the total capital employed by a firm to the number of its labor force, indicating the amount of capital used per worker.

Production Function

Function showing the highest output that a firm can produce for every specified combination of inputs.

Annual Output

The total production or quantity of goods and services produced by a company or economy in one year.

Economies of Scale

The cost advantage achieved by an increase in production, leading to a decrease in the average cost per unit through efficient allocation of resources and spreading of fixed costs.