The Coordination Problem Is Difficult to Solve Because

question 82

Multiple Choice

The coordination problem is difficult to solve because:

• A)policymakers cannot make unified decisions.
• B)aggregate price-setting behavior has built-in inflation inertia.
• C)individual price-setting behavior economywide has built-in inflation inertia.
• D)central banks are controlled by many different interests.
• E)all of the above

---

Definitions:

Innovation of New Ideas

The process of creating and implementing new concepts, products, or solutions.

Creative Destruction

The replacement of existing products, processes, ideas, and businesses with new and better ones.

Economies of Scale

The economic benefits that companies gain from their size of operation, whereby the expense per output unit typically diminishes as the scale expands.

Large Quantities

A significant amount or number of items or material, often related to production or purchasing operations.