Refer to figure.
When stress increases above the optimum level:

• arousal increases.
• performance decreases.

Arousal expresses the readiness of an individual to respond. Arousal and stress affect each other. When stress increases, arousal increases. Therefore, stress increases along with arousal.

Performance is determined by arousal/stress. Increases in arousal will result in the increase of performance, up to a point, called the break point, beyond which further arousal is disfunctional to the outcome of performance. At the optimum arousal level, we are at our most efficient - optimum arousal happens just below the breakpoint.

Note: The option 'A decrease in stress below the optimum level, decreases arousal.' is incorrect based on exam feedback. Stress operates as a stimulus that generally increases arousal. The focus is usually on the effects of rising stress, and the option 'Levels of stress above the optimum level increase arousal.' is more accurate.