One Potential Weakness of the Coordination Failure Model as an Explanation

question 11

Multiple Choice

One potential weakness of the coordination failure model as an explanation of business cycles is that

• A) government policy is unpredictable.
• B) consumer behaviour is rational and predictable.
• C) that underlying shocks that cause business cycles are expectations that are essentially unobservable.
• D) money supply shocks are predictable.
• E) there are fluctuations between "good" and "bad" equilibria.

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Definitions:

Blood Smear

A sample of blood spread thinly onto a microscope slide for examination, allowing for the evaluation of blood cells.

Erythrocytes

Red blood cells, which are responsible for carrying oxygen throughout the body.

Connective Tissue Matrix

The extracellular part of connective tissue, consisting of fibers (like collagen and elastin) and ground substance that provides support and binds tissues together.

Ground Substance

The amorphous gel-like substance in the extracellular matrix that provides support and binds cells together.