A belief that high-tech companies would be highly profitable led to the boom in Internet companies in the 1990s, which is known as a(n):
a. investment shock.
b. investment boom.
c. technology surge.
d. technology reversal.
Answer: a. investment shock.
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In a pure coordination game, as long as the players coordinate on an outcome, it does not matter what that outcome is
Indicate whether the statement is true or false
If the economy is suffering a recession and high unemployment, expansionary monetary policy can help stimulate aggregate _________________.
a. demand b. sales c. supply d. production
Which of the following statements is true? a. If the Fed chooses a money supply target, it runs the risk of interest rate variations that may create a new set of problems
b. The Fed can target the interest rate and money supply at the same time but only during periods of inflation. c. If the Fed chooses a money supply target, it runs the risk of money supply variations that may create a new set of problems. d. The Fed can target the interest rate and money supply at the same time but only during recessions. e. If the Fed chooses an interest rate target, it reduces the risk of money supply variations.
It has been said that if buyers of used goods are pessimistic it becomes a self-fulfilling prophecy. In other words, buyer pessimism causes the market to have more low-quality goods. Explain why this is true.
What will be an ideal response?