Unformatted text preview: constantly running it to the limit? Gas consumption starts to increase rapidly as greater demands are placed on that engine. What will happen to operating costs of that motor vehicle if you are constantly squeezing every horse power out of that engine? They are going to go up, not to mention all the speeding tickets you will acquire. Well a factory, a computer, a business has a “red line” as well. Machinery breaks down, people get tired, irritable, sick, etc. At the “red line”, productivity starts to decrease and costs begin to increase. So, 85% industrial capacity utilization is thought to be the “red line” for our economic engines. Can you point out the 90/91 recession and the 2001 recession in the data above? 6...
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- Fall '10
- Inflation, Capacity utilization, capacity utilization rate, 85%, red line, red line., industrial capacity utilization