The Keynesian coordination failure model is most relevant for analyzing the recession of
A) 2008-2009.
B) 1974-1975.
C) 1990-1991.
D) 1981-1982.
E) 2000-2002.

Question

Quizplus · Accepted Answer

The recession of 2008-2009 was characterized by a coordination failure in which businesses and consumers reduced spending due to uncertainty and a lack of confidence in the economy, causing a vicious cycle of reduced output, income, and employment. The Keynesian coordination failure model is most relevant for analyzing this type of recession, as it emphasizes the role of aggregate demand, animal spirits, and government policy in overcoming the coordination failure and restoring economic activity.

The Keynesian Coordination Failure Model Is Most Relevant for Analyzing