What is a common economic effect of underutilization of resources in a recessionary gap situation?

In a recessionary gap situation, there is a significant underutilization of resources, which often leads to increased unemployment rates. When the economy operates below its potential output, businesses reduce their workforce or implement layoffs to cut costs, as demand for goods and services declines. This underemployment of labor contributes to higher unemployment rates, as more individuals are not able to find work and many of those who are employed may have their hours cut.

The other options do not fit the context of a recessionary gap. Increased investment in capital goods is typically seen during periods of economic growth, not recession, as businesses become more optimistic about future demand. Higher inflation rates often occur in demand-pull scenarios when the economy is growing rapidly, rather than during a recession where demand is weak. Finally, stable production levels would indicate that the economy is at or exceeding its potential, rather than underutilizing resources. Hence, increased unemployment rates are the most direct consequence of underutilization during a recessionary gap.