A decline in an economy's level of output can lead to:
A) A lower standard of living.
B) A decrease in unemployment.
C) Higher opportunity costs.
D) Increased consumer confidence.

Question

Quizplus · Accepted Answer

When an economy experiences a decline in output, it means the production of goods and services has decreased. This can lead to a lower standard of living for individuals and families as there will be fewer goods and services available for consumption.

Answer: C
 When an economy experiences a decline in output, resources will be utilized less efficiently. This means that the opportunity cost - the cost of forgoing the next best alternative - of producing one good or service over another will increase. It reflects the trade-offs that society must make due to the scarcity of resources.

Therefore, the correct choices are A and C.

A Decline in an Economy's Level of Output Can Lead