What Is One Solution for an Economy Stuck in a Recessionary

question 2

Multiple Choice

What is one solution for an economy stuck in a recessionary output gap?

• A) Decrease production.
• B) Increase government spending.
• C) Decrease government spending.
• D) Increase inventories.

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Definitions:

Direct Labour-Hours

The total hours worked by employees directly involved in the manufacturing process, used as a basis for assigning labor costs to products.

Contribution Margin

The difference between sales revenue and variable costs, representing the portion of sales that contributes to covering fixed costs.

Production Constraint

A limit to the amount or volume of production, often caused by the availability of resources, technology, or market demand.

Machine Hours

A measure of the amount of time a machine is operated in the production process.