A bubble happens when:
A. asset prices rise for a long time, even during a recession.
B. asset prices rise higher and faster than can be explained by the fundamentals.
C. asset prices rise faster than can be tracked with traditional statistical tools.
D. asset prices rise higher than experts have predicted they would.
Ans: B. asset prices rise higher and faster than can be explained by the fundamentals.
You might also like to view...
Refer to the scenario above. If the curator values the painting at $45,000, which of the following problems is likely to arise?
A) Adverse selection B) Free-rider problem C) The paradox of thrift D) The tragedy of the commons
Which of the following is not an example of intermediate goods or services?
a. Steel used in the manufacture of cars b. Pizzas bought at a restaurant c. Legal services hired by a public accounting firm d. Glass used to manufacture sunglasses e. Vegetables used by a restaurant