Which of the Following Statements Is Most Correct

question 23

Multiple Choice

Which of the following statements is most correct?

• A) A recession is officially defined as two consecutive quarters where the real growth rate is negative.
• B) A recession officially begins when unemployment exceeds 5.0 percent.
• C) There is no hard and fast definition of a recession.
• D) The official date of a recession is determined by the Federal Reserve Board, but usually with at least a three-month delay.

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Definitions:

MR = MC

The economic principle where marginal revenue equals marginal cost; it is optimal for firms pursuing profit maximization.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, and firms make normal profits in a competitive market.

P = ATC

A condition where price equals average total cost, indicating that firms are covering all their costs but not making economic profit.

Disequilibrium

A state where market supply and demand are not balanced, leading to excess supply or demand and price fluctuations.