In the Coordination Failure Model, the 'Bad' Equilibrium Is Characterized

question 25

Multiple Choice

In the coordination failure model, the 'bad' equilibrium is characterized by a

• A) higher real interest rate and a higher price level than the 'good' equilibrium.
• B) higher real interest rate and a lower price level than the 'good' equilibrium.
• C) lower real interest rate and a higher price level than the 'good' equilibrium.
• D) lower real interest rate and a lower price level than the 'good' equilibrium.
• E) lower real interest rate and a lower aggregate output than the "good" equilibrium.

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Definitions:

Upcoding

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