For the coordination failure model to work,it must be the case that the aggregate labour demand curve must be
A) upward sloping and steeper than the labour supply curve.
B) upward sloping and flatter than the labour supply curve.
C) downward sloping and steeper than the labour supply curve.
D) downward sloping and flatter than the labour supply curve.
E) downward sloping and the labour supply curve upward sloping.

Question

Quizplus · Accepted Answer

The coordination failure model suggests that when the aggregate labor demand curve is upward sloping and steeper than the labor supply curve, there is a coordination failure in the labor market, leading to unemployment.

For the Coordination Failure Model to Work,it Must Be the Case