When an asset can be purchased with cheap, borrowed money, it is a good candidate for the development of a bubble.

Question

Quizplus · Accepted Answer

When an asset can be purchased with cheap, borrowed money, it increases the demand for that asset as more people are able to afford it, potentially leading to speculative buying and the development of a bubble. This is because the ease of financing can inflate prices beyond the intrinsic value of the asset.

When an Asset Can Be Purchased with Cheap, Borrowed Money