A financial bubble starts to inflate when:
A. investors become irrationally optimistic that an asset's price will continue to rise.
B. investors become irrationally pessimistic that an asset needs to be sold immediately.
C. a good experiences an unexplained rise in demand increasing its price.
D. inflation begins to accelerate, and monetary and fiscal policy are ineffective at slowing its growth.
A. investors become irrationally optimistic that an asset's price will continue to rise.
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What, if any, is the impact of the CPI bias on government spending and taxes?
What will be an ideal response?
Steel production creates pollution. If a tax is imposed on steel production equal to the marginal external cost of the pollution it creates, ______
A. steel producers will cut pollution to zero B. the deadweight loss created by steel producers will be cut to zero C. the market price of steel will rise by the amount of the tax D. steel producers will continue to produce the inefficient quantity of steel
If average total cost equals $15 at 20 units of output and average total cost equals $15 at 21 units of output, then the marginal cost of the 21st unit is ____
a. zero b. $15 c. $20 d. $21
For good A and good B, the consumer maximizes personal satisfaction when
A. MUAxMUB = PAxPB. B. MUA/PA = MUB/PB. C. MUA/PA = PB/MUB. D. PB/MUA = PA/MUB.