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

Question

Quizplus · Accepted Answer

The 2008-2009 recession resulted in a coordination failure of aggregate demand, as households and businesses reduced their spending simultaneously, which led to a decrease in production and employment. The Keynesian coordination failure model explains that in such situations, government intervention is necessary to boost aggregate demand and stimulate economic activity.

The Keynesian Coordination Failure Model Is Most Relevant for Analyzing