One Potential Weakness of the Coordination Failure Model as an Explanation

question 25

Multiple Choice

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

• A) evidence supporting intertemporal substitution as an important determinant of labour supply is weak.
• B) evidence supporting the existence of increasing returns at the aggregate level is weak.
• C) it fails to explain several of the key business cycle regularities.
• D) it requires that consumers not behave in a rational manner.
• E) the Bank of Canada does not use all available information.

---

Definitions:

Level Of Significance

A threshold in statistical hypothesis testing that determines when to reject the null hypothesis, commonly denoted as alpha (α).

Tenure Track

An academic employment path leading to tenure, a permanent position that provides job security and freedom from routine evaluations.

Human Resource

An organizational department focused on the management of employee-related processes including recruitment, selection, training, compensation, and performance assessment.

Adjunct

Something added to another thing but not an essential part of it, often referring to a non-tenure-track teaching position or faculty.