Author Question: One potential weakness of the coordination failure model as an explanation of business cycles is ... (Read 45 times)

iveyjurea · **on:** Jun 30, 2018

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.

Question 2

The academic work of Ben Bernanke, recent Chairman of the Board of Governors of the Federal Reserve System, suggests that he is a firm advocate of ________.

A) fixed exchange rates
B) inflation targeting
C) decreased central bank transparency
D) nominal GDP targeting