Economics

When most consumers and firms reduce spending only because they expect other consumers and firms
to reduce spending, and a recession results,
A. a self-correction has occurred.
B. an adverse aggregate supply shock has occurred.
C. a coordination failure has occurred.

I believe my answer is B

1. 👍 0
2. 👎 0
3. 👁 86
1. Give the answer B, and it will be marked wrong. What is a coordination failure?

1. 👍 0
2. 👎 0
2. A situation in which do not reach a mutually beneficial outcome because they lack some way to jointly coordinate their actions; a possible cause of macroeconomics instability.

1. 👍 0
2. 👎 0
posted by Fatima
1. 👍 0
2. 👎 0

Similar Questions

1. Economics

Do all firms in all market structures have anything in common? I think not. They all consist of buyers and sellers. In Principals of Microeconomics courses, economists make several general economic assumptions (perhaps incorrectly

asked by Mariah on December 10, 2006
2. economics, math

Could you please help me with this problem: Consider an oligopolistic market with two firms. Each of them produces using a cost function given by c(q)=q2. The aggregate demand in the market is given by 1000−p. Suppose that, in

asked by Tia on March 24, 2014
3. Economics

There are 10 identical consumers whose demand is D: p = 20 - 10q. There are 10 identical firms, each firm's marginal cost is MC(q)= 5 + 5q. The market is competitive. a) derive the market demand function b) derive the market

asked by Andrea on February 4, 2013
4. CALCULUS ECONOMICS

Consider an oligopolistic market with two firms. Each of them produces using a cost function given by c(q)=q^2. The aggregate demand in the market is given by 1000−p. Suppose that, in order to increase production, the government

asked by Jenney on March 13, 2014
5. Math economics HELP!!!

Can someone please help me with a hint to solve this problem?? I'm struggling really hard with this. Thanks!!! "Consider an oligopolistic market with two firms. Each of them produces using a cost function given by c(q)=q^2. The

asked by Rob on March 20, 2014
6. Finance

21. Consider an economy with two types of firms, S and I. S firms all move together. I firms move independently. For both types of firms, there is a 60% probability that the firms will have a 15% return and a 40% probability that

asked by Anonymous on August 2, 2010
7. CALCULUS ECONOMICS

Consider the same setting as in the previous question. Suppose that firms are NOT owned by consumers. Let s denote the size of the per-unit subsidy/tax given to the firms. Let positive values of s denote subsidies, and negative

asked by Jenney on March 13, 2014
8. CALCULUS ECONOMICS

Consider an oligopolistic market with two firms. Each of them produces using a cost function given by c(q)=q^2. The aggregate demand in the market is given by 1000−p. Suppose that, in order to increase production, the government

asked by Jenney on March 13, 2014
9. Economy

Firms benefit in many ways from increased productivity. What is one of the ways consumers benefit when firms increase their productivity?

asked by Anonymous on March 5, 2015
10. economics

How would one argue that there is no such things as a natural monopoly? What factor are involved? I would make a case that natural monopolies do not exist base on evaluation of the classic examples of "natural monopolies":

asked by Michelle on July 24, 2005

More Similar Questions