A speculative bubble causes
a. current prices to sink artificially low.
b. current prices to rise artificially high.
c. no current price changes, only possible future changes.
d. undervaluing of stock prices.
b. current prices to rise artificially high.
Economics
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Explain why the long-run aggregate supply curve is vertical
What will be an ideal response?
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According to rational expectations
A) expectations of inflation are viewed as being an average of past inflation rates. B) expectations of inflation are viewed as being an average of expected future inflation rates. C) expectations formation indicates that changes in expectations occur slowly over time as past data change. D) expectations will not differ from optimal forecasts using all available information.
Economics