When Current Output Rises Above Potential Output, We Hire Fewer

question 31

True/False

When current output rises above potential output, we hire fewer workers, which reduces the costs of production. The change in inflation will be negative.

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Definitions:

Minimum Quantities

The smallest amount of a product that can be ordered, produced, or maintained in inventory.

Maximized Total Cost

Refers to the highest possible sum of all costs associated with a certain process, project, or production activity.

Raw Materials

The basic, unprocessed resources or inputs used in the production of goods and services.

Labour

The human workforce involved in productive work, especially physical work, in an economy or for a specific project or company.