In the coordination failure model, the "good" equilibrium is characterized by a
A) higher real interest rate and a higher price level than the "bad" equilibrium.
B) higher real interest rate and a lower price level than the "bad" equilibrium.
C) lower real interest rate and a higher price level than the "bad" equilibrium.
D) lower real interest rate and a lower price level than the "bad" equilibrium.
D
You might also like to view...
What do you expect would be the effects of 9/11 on the size of the Eurocurrency markets?
What will be an ideal response?
Which of the following represents the resource supply curve for a firm that hires resources in a perfectly competitive resource market?
a.? Average total cost curve b. ?Average variable cost curve c.? Average fixed cost curve d.? Marginal resource cost curve ?e.? Marginal revenue product curve
Marginal Costs (MC)
What will be an ideal response?
In practice, one of the principal problems with aggregate demand management is that
A) changes in aggregate demand do not affect output. B) changes in aggregate demand cannot reduce unemployment. C) changes in aggregate demand are highly inflationary. D) stabilization policies could increase aggregate demand too much and at the wrong times.