Working with Economic Indicators

Chapter 7

Indicators of Resource Utilization

In order for the economy to provide the goods and services desired by households and needed by industry and government, capacity must be available to produce those goods and services. This capacity comes in the form of a labor force, plants and buildings, and equipment. When capacity is nearly fully utilized, some demand will be unmet and may result in inflationary pressures as firms outbid other firms for these resources. When productive resources are used well below capacity, the incomes of resource providers will suffer and result in contractionary pressures on economic activity. This chapter focuses on economic indicators that measure the utilization of productive resources.

The Unemployment ...