One Potential Weakness of the Coordination Failure Model as an Explanation

question 20

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 which are essentially unobservable.
• D) money supply shocks are predictable.
• E) there are fluctuations between "good" and "bad" equilibria.

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Definitions:

Oxygen-demanding Wastes

Organic wastes that reduce the amount of dissolved oxygen in water, often resulting from industrial or agricultural processes.

Activated Sludge

A process in wastewater treatment involving aerated microbial cultures that digest organic matter, reducing pollution before discharge into natural water bodies.

Biological Process

A process that occurs within living organisms, contributing to growth, reproduction, and other aspects of life.

Primary And Secondary

Refers to the first and second stages or levels in processes, industries, or education, often indicating a primary source or activity and its subsequent development or refinement.