In the Coordination Failure,the Most Likely Explanation of Business Cycles

question 54

Multiple Choice

In the coordination failure,the most likely explanation of business cycles are

• A) money supply shocks.
• B) government spending shocks.
• C) total factor productivity shocks.
• D) fluctuations between 'good' and 'bad' equilibria.
• E) labour market shocks.

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Definitions:

Accounting Profits

The difference between a company's total revenue and its explicit costs, not including opportunity costs.

Savings Account

A deposit account held at a bank or financial institution that pays interest but typically has limited transactions.

Loan

Borrowed money that is expected to be paid back with interest to the lender, according to agreed terms and conditions.

Economic Profits

The difference between total revenues and total costs, including both explicit and implicit costs, representing profits exceeding the opportunity costs of all resources used by a firm.