When there are unsustainable rapidly rising prices of some type of financial asset, such as stocks, we refer to this as a(n):
A)liquidity trap.
B)asset price bubble.
C)bad-precedent problem.
D)moral-hazard problem.

Question

Quizplus · Accepted Answer

An asset price bubble occurs when the prices of financial assets rise rapidly to levels that are not sustainable, leading to a situation where prices are much higher than the assets' intrinsic values.

When There Are Unsustainable Rapidly Rising Prices of Some Type