McqMate
| Q. |
Capacity utilization - |
| A. | is usually near 100 percent. |
| B. | represents the percent of the labour force that is employed. |
| C. | is a measure of the proportional of the existing capital stock used for current production. |
| D. | rises as the economy moves into a recession, since firms must replace unemployed workers with some other resources to maintain production. |
| Answer» C. is a measure of the proportional of the existing capital stock used for current production. | |
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Explanation: Capacity utilisation refers to the extent or level to which the productive capacity of a plant, firm, or country is used in generation of goods and services. Expressed usually as a percentage, it is computed by dividing the total capacity with the portion being utilized. |
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