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 labor 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.
B
You might also like to view...
Refer to Figure 13-2. Ceteris paribus, an increase in productivity would be represented by a movement from
A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A.
List three reasons why oligopolies are considered to be inefficient
What will be an ideal response?
What is Y - C equal to?
A) S B) S + T C) I + G D) T
An optimal decision is one that is selected based on an analysis of
a. explicit costs but not implicit costs. b. implicit costs but not explicit costs. c. both explicit costs and implicit costs. d. neither explicit costs nor implicit costs.