Multiple Choice
In the coordination failure model, the 'bad' equilibrium is characterized by a
A) higher real interest rate and a higher price level than the 'good' equilibrium.
B) higher real interest rate and a lower price level than the 'good' equilibrium.
C) lower real interest rate and a higher price level than the 'good' equilibrium.
D) lower real interest rate and a lower price level than the 'good' equilibrium.
E) lower real interest rate and a lower aggregate output than the "good" equilibrium.
Correct Answer:
Verified
Correct Answer:
Verified
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